Pick the Right Accounting Professional
Once you decide you want some help, your next step is to figure out what level of help you're looking for. Doing that will point you toward the right kind of professional. You may use a mix of professionals — for example, a bookkeeper may handle the day-to-day data entry, and a tax professional may help you at year-end; you may do all of the basic bookkeeping in-house but hire out the payroll processing.
Many new and small businesses forge close relationships with their accountants. The most important elements of this relationship are confidence and trust: you must feel confident that you are getting sound advice and that you can trust your accountant with a lot of confidential information.
The Money Factor
As you would expect, higher-level services such as tax planning cost more than lower-level services such as bookkeeping data entry. Higher-level professionals may offer lower-level services, but there's a pretty good chance that they will charge more than the going rate, even if they do charge less than their standard rate. If you need soup-to-nuts help, consider a full-service firm with different levels of employees for which the firm bills different rates. That way you can get bookkeeping rates from your CPA firm for that level of service, even though you pay higher fees for the higher-end services.
Straight bookkeeping generally costs between $30 and $60 per hour; on a monthly contract basis, you could expect to pay between $250 and $600 per month. Payroll services (which you should absolutely consider using) typically charge their fees based on the number of employees you have and how much of the process you expect them to perform. An average small business with four employees that has its payroll firm do everything from preparing the checks to making the tax deposits to filing all the year-end paperwork could expect to pay somewhere around $500 per month (plus the cost of actual payroll and taxes).
CPAs and accountants charge relatively high hourly fees, and some may have graduated fee structures based on specific tasks. Reporting and similar tasks are likely to fall at the lower end of that scale, but exactly where they fall could also depend on the complexity of both your business and the volume of reporting requirements. Bankruptcy services, business advice and planning, tax advice and planning, and other consulting services all fall at the high end of the scale. There can be a lot of variety here, but expect the numbers to start at about $150 to $250 per hour, ranging to $750 to $1,000 for a business tax return. On the plus side, every dime you spend here is fully deductible on your company's income tax return.
In most cases, CPAs charge more for their services than do any other professionals in the accounting industry. As more letters attach to their names, such as CIA (certified investment adviser), the fees climb even higher. In exchange for those higher fees, though, you will benefit from their extensive experience and unique insights.
Your Comfort Factor
Choosing an accountant involves more than opening a phone book and calling around for prices. This person may become intimately involved in your business. You want to choose someone that you can trust, both to lead you and your company in the right direction and to honor the confidentiality of sensitive and sometimes personal financial information.
Equally as important as all that, though, is looking for someone you genuinely like. You should feel secure asking questions about anything that could affect your company. You should feel free to also bring up questions about your personal financial business, especially because it will be intertwined with that of the company. Your accountant should be someone with whom you'd enjoy sharing a meal or catching a ball game. At the same time, you must feel confident enough in her advice to follow it — and when you disagree with that advice, you also should feel comfortable saying so.