If you are running a small business, you may wonder if you should hire a bookkeeper or go for full accounting services. It’s tough to handle everything yourself, right?
While doing it all might initially save you some cash, keeping up with your books and expenses can be a real headache, especially with the ever-changing tax rules in Canada; it’s even harder.
Messing up your accounting can cost you more down the line. You might miss out on
deductions, make errors in your filings, or get penalised for being late with the CRA. So, how much should you budget for accounting help?
Price changes are based on your business’s size, industry, and the services you need, such as bookkeeping or more in-depth financial services.
In this guide, we’ll examine the average cost of accounting services in Canada, what causes those costs to fluctuate, and how to choose the best option for your business without emptying your wallet. Let’s get started.
Understanding Accounting Services for Small Businesses
Running a small business means you’re always swamped, mainly when it comes to money stuff. That’s where accounting services come in super handy. They handle all the financial tasks, so you can concentrate on growing your business. But what exactly do these services do, and how can they help you every day?
Bookkeeping
Bookkeeping is key for any small business. It means tracking daily transactions, organising receipts, and monitoring cash flow. When your books are in order, you can easily see where your money is going.
Tax Preparation
Tax time can be a headache for business owners. Accountants can prepare and file your taxes, so you don’t run into trouble with the law and avoid mistakes that could cost you. Also, they can find deductions you might not know about, which could save you some cash.
Financial Reports
You can obtain monthly or quarterly financial reports to determine your company’s performance. These reports include profit and loss statements, balance sheets, and cash flow. This information enables you to make more informed decisions and anticipate future events.
Advice
Accountants can also give advice. They can assist you with budgeting, planning for expansion, or determining how a significant investment might affect your business. This insight is helpful for small businesses trying to grow without wasting resources.
Typical Pricing Models for Accounting Services in Canada
So if you’re trying to figure out how much accounting will set you back for your small business, right? It depends on a few things, like how complex your finances are, how much help you need, and who you go with: a freelancer, a company, or someone you hire full-time. Here’s a quick rundown to give you a general idea.
Basic Bookkeeping
If you’re starting, basic bookkeeping is usually enough. This means keeping track of transactions, balancing accounts, and sorting expenses. If you use online software or a remote bookkeeper, you could get away with paying as little as $20–$150/hour or $300–$2,500/month. Remember that the more transactions and manual work involved, the pricier it becomes.
Monthly Bookkeeping with Financial Reporting
Want someone to handle the books and give you reports? These plans often include income statements, figuring out cash flow, and quarterly meetings to check things out. Many growing small businesses like this level of service to stay in the loop with their finances. The price ranges from $300 to $2,000+.
Hourly Rates
Some accountants charge by the hour, especially if it’s a one-off project or you need advice. This is normal if you need assistance with budgeting, planning your cash flow, or changing your business setup. Charging by the hour can be handy, but watch out; those costs can pile up fast. Hourly prices range from $150 to $400.
Payroll Services
If you have employees, then you need payroll services. What you pay each month hangs on how many employees you have and if you want stuff like tax filings, direct deposit, or managing benefits. Some accountants lump this together with other services, which might save you some cash.
What Affects Accounting Costs?
For small Canadian businesses, accounting costs depend on things inside and outside the company. These things decide how much help you need and what kind of accountant is best for you.
Business Size and Yearly Income
The size of your business changes the accounting support you need. If you’re making good money, your finances are more active. You’ll have more costs and income to track and need to stay on top of taxes. Bigger businesses usually need more help to stay organised and a professional to review things, which a smaller business might not need.
Complexity of transactions and industry
Some industries need more detailed accounting than others. A business that sells services and has a few regular clients is easier to handle than a store with daily sales, returns, and stuff to keep track of.
If your transactions are complex, like if you have lots of payment methods, different kinds of products, or many locations, your accountant will need more time and know-how. Industry rules also change, and if you’re in a field with many rules, your accountant needs to know the specific reporting rules for that area.
Frequency of Required Services (Like Bookkeeping and Taxes)
How often do you need help with accounting changes, and what do you need ongoing? If your business does monthly bookkeeping, pays quarterly taxes, and makes yearly reports, your accountant will be around a lot.
But it won’t be as much work if you need someone only occasionally, like for taxes at the end of the year. When things are done often, it means more consistent attention, talking, and keeping records up to date.
Qualifications and Experience of the Accountant
Your accountant’s abilities and experience can influence the service you receive. Someone with professional certificates or extensive experience will provide you with better guidance, handle compliance more effectively, and understand your business’s finances.
Use of Accounting Software and Technology Integration
Technology changes how well your accountant can work. For businesses using online software or automated systems, it’s easier for accountants to access data, match records, and make reports fast. If you’re still using old systems or doing things by hand, your accountant might need to spend extra time just getting stuff in order before they can start working.
Choosing the Right Accounting Service for Your Small Business
Accounting for small businesses in Canada is not just about finding the cheapest option. You want someone who gets your business, fits in with how you do things and can help you grow. A decent accountant should do more than keep the books balanced. They should make things clear, save time, and ensure you follow all the CRA rules without stress.
Get the best accounting services from Accounting for Realtors.
Conclusion
So, there’s no magic number for what your small business in Canada should pay for accounting. But if you get what goes into the price, it’s simpler to decide. Things like how big your business is, how complicated your books are, how often you need help, and how experienced your accountant is all play a role in what’s reasonable.
Instead of only examining the price tag, consider what you’re getting from your accountant, such as keeping the tax people happy, saving time with tech, or giving advice to help your business grow.
