The cost of hiring an accountant varies based on factors such as the complexity of the finances to be worked on, services needed, accountant expertise and location. To give you a ballpark figure, hourly rates range from £15-£30 per hour for a junior accountant to £300 for certified accountants with lots of experience. Monthly/annual fees could run from £100-£500 a month for small business needs to £2000-£10,000 a month for large businesses. Regular project fees such as tax preparation, financial statements, business valuations and audits can either be included in retained fees or charged as fixed fee tasks. As costs will vary by location and business need, it’s important to get several quotes to compare your options when looking to employ or hire a business accountant.
How Much do UK Business Accountants Cost?
The average cost of hiring a business accountant in the United Kingdom is about £125 to £150 per hour. Getting an actual hourly rate depends on numerous factors such as experience and location.
An accountant with more years of experience is likely to charge higher than a fresh graduate with less practical knowledge. Location is another important consideration when finding an accountant that fits your salary budget. You can expect a London-based accountant to charge more than their counterpart living in a less expensive city.
The last factor to consider before hiring an accountant is whether you plan to retain them. Generally, it costs more to hire a professional as an employee than getting them to complete a short-term or one-time task. You will have a perfect answer to the estimated cost of a business accountant when you evaluate the discussed factors.
Why are Accountants so Expensive?
An accountant is more knowledgeable in an area of life that many people struggle with. They are experts in analysing financial records for business investment opportunities or financial risk strategies. This knowledge makes their financial advice immensely valuable and important for every business seeking growth.
Another reason is that the most qualified accountant has vast experience which is useful for large companies that cannot afford to make financial mistakes. A good accountant must have spent much time improving their analytical skills and gathering knowledge that makes them better than the average business person.
Their education and additional qualifications are also costly which translates to their high value immediately after graduation. With thousands of pounds spent on college and professional certifications in the UK, we can expect a corresponding pay rate.
All these factors contribute to the non-negotiable importance of hiring a business accountant for your company. An organisation without a qualified accountant will struggle to keep track of its finances. Compliance with tax laws also becomes an issue since it is challenging to manage a business and still follow through with the details of every transaction.
How do Accountants Charge Clients?
A business accountant can charge their client in different ways but the most common approach is hourly payment. A fixed price per contract or specific service also works if there is a proper discussion before hiring them. Take time to discuss your expectations from the accountant and confirm you can afford their preferred fees.
For example, let the accountant know whether the position is a full-time or contract position. Some businesses hire accountants only when it is time to file their tax returns. The process is complicated for self-employed individuals or managers of limited liability companies who pay self-assessment taxes.
You must also note that many accountants charge higher during tax time because of the increased demand for their services. Tax payment deadlines are usually due around the end of January and July. An excellent idea is to hire an accountant ahead of those times to reduce costs and give them enough time to properly file the taxes.
What are the Benefits of Hiring an Accountant?
Hiring a business accountant is beneficial to your company in numerous ways.
The most obvious advantage is the potential to save money on expected taxes by checking your eligibility for certain deductions and allowances. For example, you can claim expenses like travel and office supplies as a self-employed person.
Having an accountant makes it easier to identify such opportunities to minimise total tax. They also assist with budgeting and how to choose the best investment deals. The overall financial planning of the business improves when you have a business accountant. You also stay updated with the latest developments concerning important tax laws and regulations.
Another benefit of hiring an accountant is their usefulness when facing legal issues. An experienced accountant functions as a buffer between HMRC and your business. They understand the law regarding finances and taxes and provide valuable insights to overcome whatever legal complications.
An accountant also helps you focus on more important aspects of running the daily operations with the assurance that the finances are in good hands. This is a significant advantage of large companies with accountants over smaller business owners who struggle to combine finance management and running the business.
There is no limit to how fast you can grow if you have a business accountant. They can utilise the latest accounting software and management tools to optimise the use of available company resources.
What’s the Difference Between an Accountant and a Chartered Professional Accountant?
The major difference between an accountant and a chartered professional accountant (CPA) is the certification they have. The common assessments are the Institute of Chartered Accountants in England and Wales (ICAEW) and the Association of Chartered Certified Accountants (ACCA) exams.
Both professional tests evaluate the accountant’s knowledge of financial services like auditing, taxation and bookkeeping. Hence, we can expect a CPA to have more experience, especially with higher professional qualifications. It is important to note that their fees are more expensive than regular accountants.
This does not mean only CPAs are worth hiring. Besides, most accountants in the United Kingdom are not chartered professional accountants. You can hire a regular accountant if they have worthy years of experience or a promising track record. Do not also forget to check your company’s budget before hiring an accountant.
How to Choose an Accountant
There are certain points to guide your selection process for hiring a business accountant.
Excellent communication
The first consideration is the communication skills of the preferred candidate. As a business manager, ensure you only hire someone who can perfectly explain your finances without speaking jargon or confusing you with excessive technical terms. Managing a business account is stressful and it is only logical to have a professional who makes things easy to understand.
The right experience
The next step is evaluating the accounting experience of your potential hires based on their expected responsibilities in your company. An important criterion to include in your hiring process is finding applicants with more related job experiences.
A professional accountant with a verifiable record of managing the finances of similar organisations provides the assurance needed to focus on other business needs. Besides, the best accountants are not necessarily chartered professionals and your selection should focus on relevant work experiences. Your interview should aim to pick someone who can make critical financial decisions that help the company.
Budget
The cost of employing a business accountant is another consideration that determines your final choice of applicant. We recommend finding a balance between experience and quality. For example, ask around for the accountants offering free consultations and use the opportunity to discuss the cost of hiring them.
Many accountants charge per hour but some might accept a reasonable fixed rate. A part of the negotiation on payment also involves discussing expected responsibilities and contributions to the company. Keep things polite but remain serious about how to achieve stated objectives.
Understanding of your industry
It is better to hire a professional accountant with experience in the business niche than someone who needs time to learn on the job. The relevant ideas of an applicant who understands the industry foster growth. For example, the manager of a construction company should choose an accountant who has worked with other construction firms. The hands-on experience they already have can help to manage your business finances and minimise tax bills by claiming eligible deductibles and allowances.
Additionally, choose an accountant who is updated on the latest industry practices and accounting software. Hiring such qualified talents guarantees an effective use of available resources. The benefits also include more effective tracking of finances and tax bills. A qualified accountant makes it possible to scale up without incurring additional costs.
Key Skills
Reliability and accuracy is another value to consider. Your preferred candidate for the business accounting role must be someone who does not make mistakes that could cost the business. The simple way to confirm this is to ask about their previous work history and the roles they managed. They should also be tech-savvy and capable of understanding how to use essential software to analyse financial reports.
The Hiring Process
Asking colleagues and trusted friends to recommend suitable accountants is one strategy for hiring the best talents. You can talk to business associates who have hired some before about the possibility of finding a professional accountant with an impressive track record. The reviews should give an honest idea of what to expect. Alternatively, consider searching online or look people up the Yellow Pages.
The next stage of the hiring process is setting up an interview. Schedule a date and time to cross-evaluate your list of preferred candidates. It is the perfect chance to verify the experience, qualifications and personal communication skills. You should check how they respond to questions and if they can explain complex situations in simple terms. An interview is also an opportunity to discuss how much the accountant would charge.
Selecting an accountant to oversee the business finances is a very important process. Your business thrives when you successfully hire a competent professional. Similarly, hiring an unsuitable person might result in a waste of time and resources.
Other Professionals that Could Help Your Business
The cost of a business accountant is not the only important hiring budget to calculate. A growing business requires having other professionals handle different aspects of your daily operations. These include:
Business lawyer: Your company needs a business lawyer to sort out legal issues and ensure full compliance with related regulations. That includes cross-checking contract papers and advising if a business dispute occurs. Some clients or competitors can attempt to take advantage of some situations if they know you do not have a business lawyer.
Financial advisor: It is easier to set realistic business targets and expectations when you have a financial advisor. They are professionals who advise the company on the best investment opportunities, pensions and essential decision-making processes. Your financial advisor can also advise you on tax payments and how to identify possible deductions and allowances.
Insurance broker: Every business needs an insurance broker to find suitable insurance policies for their needs. Since terms and conditions vary for every insurance company, you might require a broker to navigate the complexities involved. They can also save you money by choosing the insurance policy that protects your business from potential risks.
IT consultant: the responsibilities of an IT consultant include managing the technology needs of your business. A tech consultant should also be in charge of setting up a business network with the right software and keeping systems updated. The security of your networks is another job of the IT consultant to protect the business against risks of data loss from cyberattacks or hackers.
Final Thoughts
The answer to the question of how much a business accountant costs will depend on a number of different important factors as outlined above. These include the size of the business, the skills of the professional, the services you require from the accountant and the urgency of the role to name a few. It would typically cost more to hire an accountant during the tax returns period too.
Another determining factor of the cost is whether you are retaining the accountant in a full-time role or just a temporary contract position. This is an important decision since the average price of a UK accountant is about £125 to £150 per hour which can quickly add up.
When advertising for a business accountant, keep these things in mind and make sure that you ask potential candidates relevant questions during the interview process to determine if they’re the right fit for your business.
