Keeping track of your day-to-day financials—not to mention the big picture of your business’s financial health—is crucial, whether you’re a startup, another small business owner, or a large corporation. But when you’re on the smaller side or just getting started—instances where every dollar counts and time is money—the often time-consuming responsibilities of accounting and bookkeeping often fall on the already full plates of business owners.
If you’ve always handled this type of work yourself, a freelance accountant can step in and handle many of the financial aspects of the business, which immediately frees you up to focus on the daily operation of your business. Hiring a freelance accounting professional to handle your bookkeeping, month-end close, taxes, or any other accounting work can be invaluable—but how much does it cost to hire a freelance accountant?
How much to budget for an accountant will largely depend on how much work you need, how quickly you need to complete the work, what kind of expertise or advanced degrees you need, and the complexity of tax laws in your industry and country. But with all the time and energy it can save you, the ROI can be a big one. In fact, a good accountant can pay for themselves in their ability to help protect you from fraud, loss, fines, and compliance issues.
In this article, we’ll break down some key cost factors to help you more accurately estimate the cost to hire an accountant for your business.
Define Your Accounting Needs
The first step in estimating a budget (and also the type of contract) is to determine whether you need a freelancer accountant for occasional projects or ongoing, day-to-day accounting operations. Depending on your needs, you can hire an accountant on a per-project basis and pay them hourly, or go with a fixed-price if you have a short-term project. If you need an accountant for an ongoing basis, you may need to consult your human resources partner or another advisor to verify the worker’s classification.
Next, determine types of services you’ll need from this professional. The good thing about hiring a freelance accountant to handle specific tasks is that you can narrow down what skills you need the professional to have. Skilled accounting pros on Upwork can provide many different important services, whether it’s tax season or you need expert advice on accounting issues that arise for your business all year round. They can handle your bookkeeping, analyze your financial records to check for inconsistencies and errors, prepare and file taxes on time, and even provide a complete audit of your business to make sure your records are accurate and up to date.
Will the accountant be handling paying vendors? Will they complete your monthly tax filings? How often will you need profit and loss statements generated? Asking these types of questions will help you create a job description that will get you closer to estimating a budget, and finding the perfect professional. In outlining the role and type of contract, other questions you should ask yourself are:
- Is this for an Ad Hoc project or ongoing accounting operations?
- If it’s ongoing, for how long?
- What will they be doing?
- What areas of the work you will delegate to them vs. continue to do on your own?
- Is any specific system access required?
Also, consider what your accounting needs may be like in the near future. You may want to select an accountant who will be able to grow with your organization. Even though you may not need services like bookkeeping or payroll today, it’s a smart idea to ensure that your accountant will have you covered if a need arises.
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Now that you’ve laid out an idea of the day-to-day tasks or project you’re hiring an accountant to handle, here are a few additional factors that can typically affect cost.
COST FACTOR #1: WHAT DO YOU NEED FROM AN ACCOUNTANT?
Are you hiring a freelance accountant for a one-off job (say, yearly taxes), a few hours a week, or for a more ongoing basis?
You may think that your startup is not big enough to warrant an accountant, and that you will not spend much time sorting out accounting issues. But unless you’re an expert in tax and finance (in other words, an accountant yourself), this won’t be the case. The financial aspects of running a business change on a regular basis–from keeping your books up to date, approaching funding sources or market analysis – an accountant provides your business with a great deal of essential support, time savings, and help to ease the load of setting up a company.
What you need them to do and how much time these tasks will take up will contribute to the cost to hire an accountant. What you delegate to them will take tasks off your plate, but make your accounting budget grow. For example, you might hire an accountant to help with:
- Paying for everyday expenditures
- Recording forms of income
- Verifying deposits and other transactions
- Balancing bank accounts
- Billing clients directly
- Managing past-due accounts
- Preparing monthly financial statements
- Handling payroll (with proper privacy and security measures) and withholding taxes
- Generating business reports
Cost Factor #2: Experience and expertise.
Businesses definitely hire an accountant for their expertise in tax codes and number crunching and the other work listed above, but experienced accountants are capable of providing you with so much more—if you need it. A great accountant is also going to be an expert in business and how finance relates to your everyday operations. With expertise comes more reliability and often a higher cost—plus important traits like honesty, communication, and work ethics. The last thing you want is someone giving you an excuse when Uncle Sam comes knocking about overdue taxes.
Do you need an accountant with advanced training, specialized experience, or an advanced degree? This will also affect their rate, and your budget. Some bookkeepers may have advanced training or a degree in a field such as accounting, finance, or business administration. For example, some accountants on Upwork charge around $25-35/hour, while senior business consultants and analysts can charge as much as $180/hour. Others may specialize in certain job sectors such as law, health care, or automotive, which would give them certain insights that could make them a great fit for your project.
Those with specialized degrees may have a better overall (or more specific) knowledge of advanced tasks like loan packaging or preparing business plans. Do you require any professional certifications? While this isn’t necessary, belonging to an organization like the National Association of Certified Public Bookkeepers can show a deeper commitment to the field.
Some work translates accounting to higher-level tasks like consulting, planning, valuations, etc. Other advanced accounting tasks may include:
- Business valuation
- Risk management
- Strategic planning
- Financial analysis
- Writing a business plan
Typical Rates Charged by Freelance Accountants on Upwork*
|Type of Accountant||Average Hourly Rate|
|Junior accountant, Billing analyst, Accounts payable analyst||$20-35|
|Senior Business Consultant, Risk Management||$60-150+|
*Reflect rates charged by freelancers on Upwork in North America with over 1,000 hours and 90% success rate.
Cost Factor #3: Complexity of your business’s finances and taxes.
Besides keeping business documents organized and generating reports, bookkeepers can handle a number of everyday clerical and accounting tasks. If your business’s tax situation is more complex, for example with numerous vendors, contractors, locations in different states, etc., you might need someone with more advanced skills to navigate them, which could get more expensive.
Since bookkeepers can have a wide variety of skills and specializations, it’s important to know the types of experience your ideal professional should have. For example, a bookkeeper who worked with a large manufacturer may have ample experience tracking accounts receivable and purchase orders, but not much exposure to payroll or generating financial reports. Others might have extensive experience in areas like inventory audits, bank reconciliation, or accounting.
Also: The explosion of regulations over the last several years has created a number of liabilities for small businesses. Good accountants have the capability to lead you in these areas and help you avoid costly fines associated with insurance policies, workmen’s comp, compliance, and more.
Cost Factor #4: Are they proficient in the software and systems that you currently use?
Do they have any specific systems access needs? Does the freelancer need to have expertise in certain non-standard software? Since there are many different types of accounting and bookkeeping software on the market (QuickBooks and Xero are two popular options), it may make sense to include this as a requirement in your posting. A good bookkeeper will be comfortable using the internet, file sharing programs, and any other necessary tools.
They can also help save you plenty of money by helping choose particular modules of software packages that might be more cost-effective, version control systems, and more.
Cost Factor #5: Location
When given all the necessary access and documents, accountants can work remotely from their own location—and that location can impact their rate vs. other locations with higher or lower costs of living.
When searching for an accountant outside of your region, one of the most important factors to remember is how location can affect real-time communication—especially if your accounting needs are time-sensitive or up against a deadline.
Need more resources? Get tips on how to hire an accountant before you craft your job post.