It is important to know the reasons why you would need to hire an accountant for your small business. This comes even before shortlisting who to hire. Furthermore, it is advisable to find out the average market rate charged. Although many accountants charge a flat hourly rate, most consider the size of the company, the bookkeeping method, and the industry. The costs charged in big enterprises tend to be higher than those for small businesses. How will you know if you are paying your accountant too much?
When considering the cost of hiring an accountant, it is important to consider what your time is worth. A professional may take an hour or two to file your taxes, while you will need several days to get it done. The cost of hiring an accountant is highly dependent on the volume of work, how efficient the bookkeeping system used is, and the services required.
Outsourcing accounting services has become quite popular in Singapore. For bookkeeping and accounting services, you may be charged from SGD$100 per month. For payroll services, the charge could be SGD$10 to SGD$20 per employee, and SGD$400 per year for tax service fees.
In some cases, bookkeepers and accountants charge per hour. Hourly rates for bookkeepers can be anywhere between $25 and $80, while that of accountants is between $150 and $450. Certified Public Accountants (CPAs) tend to charge more. Hourly rates, primarily if one works many hours in a month, is likely to yield a higher bill than a monthly rate.
Some accountants charge based on the volume of transactions. For example, for low volume transactions, some companies ask for S$300 to S$400 per month. For medium volume transactions, the charge may be S$500 to S$800 per month, while large volume transactions may cost up to S$1500 a month.
There are other things to consider in the search and hiring process and more information about them can be found here.
How are Your Books Organized?
Before an accountant gives an estimate for his services, he will want to look at your financial records. If you have poor bookkeeping, he will likely charge you more than he would a business whose records are well kept. This is because he will spend more time organizing your books and preparing your company’s financial outlook. For you to reduce the asking fees, it is best to have an accounting system in place from the inception of the business. You can use the accounting solutions in the market to make your work easier and to reduce the costs.
The Location of the Business
Most accountants will come and look at your books in your office. This means they will incur transportation costs which will part of the bill you’ll receive. An accountant based further away will charge more than those located closer to you.
Experience Level of the Accountant
It is important also to consider the experience of the accountant. Is the accountant fully trained and possessing work experience that could be used When you hire an inexperienced accountant, it may be counterproductive because you will need to pay someone else to rectify the work.
Knowing the average cost charged by accountants will help you plan on how often you should have an accountant to come take a look at your books. You can also cut financial costs and time used by ensuring there is proper record keeping, and that all receipts and invoices are filed to make the accountant’s work easier.
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