Do Accountants Offer a ROI for Freelancers?

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As a freelancer, your time is your money. So, should you hire an accountant? Much of this decision depends on how comfortable you are at tax administration, but an accountant offers far more than simple bookkeeping services. Learn more in this guest post from freelance writer, Gemma Church.

Glazed eyes? Check. Confused by endless columns of numbers? Check. Sweaty palms and want to hit your head against the keyboard? Check.

Sounds like you’re a freelancer trying to crunch some numbers for a looming tax return.

What’s the solution? Many freelancers choose to hire accountants, thinking the tax savings will outweigh the cost of paying for the help. In this article, learn a shortcut for calculating if an accountant is worth the investment for your freelancing business.

Should you hire an accountant? If you’re less than savvy with money and taxes, it’s a no-brainer. It also depends on the amount of money you have available, and how much accounting work you expect or want to do yourself. It also depends on your circumstances. If you have a straightforward way of working and billing, and only a couple of clients, you could go it alone. But freelancers with more complicated financial affairs may want to call in a professional.

If you opt for a fixed-rate agreement with an accountant, you know exactly what you’ll pay on a monthly basis, and what services you’ll receive.

You can easily spend upwards of $2,000 per year for this professional advice and work, but it could be a worthy investment, especially if you’re missing out on valuable deductions

Here’s a quick calculation to help explain the ROI of an accountant

  1. Take your hourly freelance rate. Let’s assume it’s $100 per hour for this example.
  2. Find an accountant with expertise in helping freelance professionals who offers a fixed monthly fee. Some can average around $200 per month.
  3. Take the accountant’s rate ($200) and divide this by your hourly rate ($100). In this example, the answer is two. In other words, paying an accountant $200 per month will cost roughly two hours of your time.

Now, think about those two hours in terms of how much time it would take you alone. To complete all your financial administrative tasks, read every piece of tax legislation, and meet every deadline. Could you do all of that in just two hours every month?

Much of the decision will depend on your personal feelings toward tax administration and how comfortable you are with your state’s tax and legal system. If you have the patience for the fine print and are prepared to put in the legwork, go for it.

But, as a freelancer, your time is your money, so be honest with yourself. How complicated are your freelancing affairs? Are you maximizing your take home pay and avoiding penalties by knowing your way around the system? Do you hate administrative tasks, or do you revel in them?

Should you hire an accountant? Only you know the answer to that question.

This story was submitted by freelance writer Gemma Church and does not constitute the views or opinions of Upwork.

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Gemma Church

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Gemma Church is "the freelance writer who gets tech." She is a technical writer at Nixon Williams and a specialist journalist, blogger, copywriter and ghostwriter… more