How much does an accountant cost?

The short answer is ‘this depends’– which probably isn’t the answer you wanted. Each business and individual is different. Therefore putting an exact figure on the cost can be tricky.

So how much does an accountant cost? Accountants generally charge a fixed fee for fixed services or there will be a variable fee depending on the type of work completed for a given period. In the case of sole traders and contractors, many tend to have relatively basic accounting needs, but there’s the other end of the spectrum where some may have more demanding needs.

Limited companies have more compliance to do, therefore their costs tend to be higher than that of a sole trader or contractor. There are more ‘hoops to jump through’ as a limited company.

Each client may require different specific tasks to be undertaken, which in turn will take a different amount of time, which means their fees can vary considerably.

How much do accountants charge for small businesses?

For small businesses, many accountancy firms offer a package containing multiple services all under one fixed price. This fixed price can vary from as low as around £50 up to £700. This large variation is obviously something you want to look into deeper to ensure you are obtaining good value for money when choosing your accountant.

Fixed Fee Accounting Structure

The price can vary depending on the services offered, the size, reputation and location of the accountancy firm, and potentially the specialist knowledge held by a particular accountancy firm. It is therefore not a decision to rush into until you understand whether a firm has the correct services and expertise to understand your specific needs.

What services should you expect as a contractor for your monthly fee?

  • A dedicated accountant (some companies provide a client services employee to manage many clients and accounts)
  • Creation and submission of end of year accounts
  • Tax calculations
  • Advice on financial planning and efficiency
  • Self-assessment tax return
  • Vat returns (if applicable)
  • Payroll (if applicable)
  • HMRC and Companies house returns (if running through a company structure)
  • IR35 assessment (if applicable)

What should you look out for?

Specific knowledge and understanding

Contractors working in the public sector who have to take into account IR35 legislation need to ensure their accountant understands this area. Going to a mainstream accountant who doesn’t fully understand this or work with many contractors will likely be of less value to you than those who have worked with many contractors and who keep up to date with factors affecting the financials in your industry.

Hidden charges

You want to make sure that everything you need is covered under the fixed fee arrangement and that there aren’t additional charges added for services you use regularly. It is also worth checking whether your monthly fee has a minimum cancellation period or leaving charges before trapping yourself into an agreement. 

Relationship with your accountant

This is often overlooked, but having a good relationship with your accountant is important, and can make your experience much smoother.

You need to have a level of trust with your accountant as they will be advising you on important financial decisions and submitting accounts that are still your legal responsibility. Therefore, look to engage with your accountant before signing up and ensure you can build a relationship with them.

Understand what you want

It could be advantageous to know whether you are after someone to simply take control so you can be as hands-free as possible with your accounting, or whether you are more after professional advice on how to improve your income and ensure you are utilising all of your available allowances effectively or both.

Deciding on this early on will help you then chose a firm offering the correct services for your needs, without you needing to search around continuously, which can add stress and time to this area you may already not want to spend too much time on.

Whatever your needs, Freedom In Numbers are here to help you if you want to explore the available options. If you would like to learn more feel free to drop us a line at 07812119562 or email us via info@freedominnumbers.co.uk