An important part of running a small business is efficiently managing your finances. It not only helps you understand how your business is performing but also ensures compliance with local laws.
However, as your business grows, managing finances can become increasingly complex and time-consuming.
This is where hiring an accountant comes into play. But for many small business owners, questions arise such as: Do I really need an accountant? What services can they provide? How much will an accountant cost for my business? Should i outsource my accounting? and so on.
In this article, we will take a look at key accounting services for small business, pricing models for accountants, and compare the cost of hiring an accountant across different countries.
What Can an Accountant Do for Your Small Business?
Before we discuss costs, let’s understand the various valuable services an accountant can provide for your small business:
- Bookkeeping: Keeping track of all your financial transactions, ensuring your books are accurate and up-to-date.
- Tax preparation and filing: Handling your tax obligations, maximizing deductions, and ensuring timely submission to tax authorities.
- Financial statement preparation: Creating important documents like balance sheets and income statements to give you a clear picture of your business’s financial health.
- Payroll processing: Managing employee salaries, taxes, and benefits in compliance with labor laws.
- Cash flow management and forecasting: Monitoring your cash flow and predicting future financial trends to help you make informed decisions.
- Audit support: Assisting with internal or external audits of financial records.
Depending on your business, you might need some, or all of them. Moreover, these services will impact your costs if you hire accountants based on individual services. For example, hiring an accountant just for bookkeeping will cost less than engaging them for bookkeeping, tax preparation, and financial planning combined.
When to Hire an Employee VS Outsourcing Your Small Business Accounting
Deciding whether to hire an in-house accountant or outsource your accounting needs is a decision that has substantial impact on your business costs, both in the short and long term.
Some business owners jump the gun and hire a full-time accountant when they don’t really need one. Others go the opposite route, paying a significant amount every month to outsourcing firms for every task when they would benefit more from a dedicated in-house financial expert.
A. Hiring an In-House Accountant
An in house accountant develops deep understanding of your business and provides immediate, on-site support.
Consider hiring an employee when:
- Your business has complex, ongoing financial needs
- You require daily financial management and insights
- You want someone fully integrated into your company culture
- You need immediate, on-site financial support
B. Outsourcing Accounting
Outsourcing your small business accounting to an external accountant/firm provides you access to experts with up-to-date knowledge of accounting practices.
Outsourcing might be better when:
- Your business is in a growth phase with changing needs
- Your accounting needs are periodic or project-based
- You require specialized expertise for specific tasks
However, keep in mind that external accountants and accounting firms typically use one of the following pricing models when offering outsourced services in the US and other countries:
- Hourly rates: $40 to $300 per hour
- Monthly retainer: $200 to $2,500 or more
- Revenue-based pricing: A percentage of your business revenue
- Project-based fees: $200 to $500 or more for specific projects
Comparison of Cost of Hiring an Accountant Across Countries
The cost of hiring an accountant can vary significantly depending on the country. For instance, the average annual salary of an accountant in the United States is around USD 65,000 while the position starts around USD 50,000. Similarly, the average annual salary of a full time accountant in Australia is AUD 80,000 (approximately USD 54,000).
However, if you look at countries like Philippines, the cost of accountant drops significantly with annual salaries ranging from USD 6,000 – 9,000 for entry level accounting positions and USD 17,000 -21,000 for experts with over 5 years of experience.
Below is a comparison of average annual salaries for accountants in different countries:
Cost-Saving Options for Small Businesses when Hiring an Accountant
1. Hiring a Remote Dedicated Accountant Internationally
This option combines the benefits of having a dedicated employee with significant cost savings. Through an Employer of Record (EOR) service such as RecruitGo, you can hire a full-time accountant in the Philippines or Indonesia for a fraction of the cost of a local hire, while ensuring compliance with local labor laws. These accountants are well versed in international accounting standards and are used to working with companies in the US, Australia, etc.
2. Hybrid Approach
To keep costs lower, many small businesses rely on a hybrid approach. They handle basic bookkeeping in-house and outsource more complex tasks like tax preparation and financial planning to accounting firms. This allows you to maintain control over day-to-day finances while leveraging expert help for specialized needs.
Hire a Dedicated Accountant with RecruitGo
If you’re considering hiring a remote dedicated accountant in the Philippines, RecruitGo’s Employer of Record (EOR) service can help. We handle all the complexities of international hiring, ensuring compliance with local laws while you benefit from high-quality talent at a fraction of the cost.
Our local experts will source the right candidates based on your needs, manage payroll, and offer employee benefits on your behalf.
Fill out the form below and we will put you in touch with one of our recruitment experts.
