How much does an accountant cost?

PHS Team

24 Feb, 2025

The cost of hiring an accountant can vary based on several factors, including the services you need, your business size, and your location.

On average, small businesses might pay anywhere from £30 to £150 per hour, while fixed monthly fees can range from £100 to £500, depending on the complexity of your financial needs. 

Understanding these costs is essential for budgeting effectively and ensuring you get the right support for your financial situation.

Average Accountant Costs for Small Businesses

Most small business accounting packages cover essential services like bookkeeping, tax preparation, payroll management, and financial reporting. 

1. Monthly Fee Structures: Small businesses can expect to pay between £100 and £500 per month for accounting services. This fee often depends on the complexity of your financial needs and the range of services provided.
2. Costs for Sole Traders: Sole traders typically face lower costs, averaging £30 to £150 per hour or around £100 to £300 monthly. Their simpler financial structures result in less time needed for accounting tasks.
3. Costs for Start-Up Businesses: Start-ups may incur costs ranging from £150 to £400 monthly, reflecting the need for support as they establish their operations and navigate initial financial challenges.
4. Costs for Established Businesses: Established businesses often pay between £300 and £1,000 monthly, depending on their size and the complexity of their accounting needs, including more detailed financial analysis and reporting.

Accountant Fees for Tax Returns and Self Assessment

The fees for preparing a self assessment tax return range from 150 to £300. The exact cost depends on the complexity of your finances and the accountant's expertise.

Several factors can increase these costs. 

For example, if you have multiple income streams, investments, or rental properties, your tax return will require more detailed work, leading to higher fees. Additionally, if you need your return completed quickly or have missed deadlines, accountants may charge extra for their urgent services.

By ensuring you take advantage of all potential savings, a good accountant can help reduce your tax liability, often making their fees worthwhile in the long run.

How can you pay your accountants

Many accountants offer fixed monthly fees that cover a variety of services, providing you with predictable costs and ongoing support. Alternatively, you can choose hourly rates for specific tasks, such as tax preparation or financial consultations, which typically range from £30 to £150 per hour based on the accountant's expertise. 

You can also select individual services, paying only for what you need, like bookkeeping or tax filings. You don’t have to stick to one payment method. Combining a monthly retainer for regular services with hourly rates for occasional tasks can help you optimise your overall costs.

On average, expect to pay between £50 and £150 per hour for professional accounting services, depending on the complexity of the work and the accountant's experience. This flexibility allows you to find a payment structure that works best for your budget and financial situation.

Different Accounting Services and Their Fees

Understanding the costs associated with various accounting services can help you budget effectively. Below is a table outlining typical fees for common accounting services:

The size of your business impacts accounting fees. Higher company turnover and a larger number of employees usually require more complex financial management, leading to increased costs. 

For example, businesses with multiple revenue streams or extensive payroll needs may incur higher bookkeeping and tax preparation fees. By understanding these factors, you can better anticipate your accounting expenses and choose services that align with your financial goals.

The Importance of Good Accounting

Good accounting is important for the success and sustainability of any business or individual’s finances. It serves several key purposes:

1. Financial Clarity: Accurate accounting provides a clear picture of your financial situation, helping you understand income, expenses, and cash flow. This clarity is essential for effective budgeting and planning.
2. Tax Compliance: Proper accounting ensures that you meet all tax responsibilities on time, reducing the risk of penalties and audits. It helps track deductible expenses, making tax preparation smoother.
3. Informed Decision-Making: With reliable financial data, you can make informed decisions about investments, expansions, or cost-cutting measures. This strategic insight is important for long-term growth.
4. Building Trust: Well-maintained financial records increase credibility with stakeholders such as lenders, investors, and suppliers. Trust in your financial management can lead to better opportunities and partnerships.

Good accounting is the foundation of sound financial management, enabling clarity, compliance, and informed decision-making for a prosperous future.

Tips for Minimising Your Accounting Fees

1. Keep your financial documents organised and up-to-date. 
2. Use folders or digital tools to categorise receipts, invoices, and bank statements. 
3. Respond quickly to your accountant’s requests for information. 
4. Utilise accounting software that your accountant endorses. 
5. The tools are often smooth processes like invoicing and expense tracking, making it easier for both you and your accountant to manage finances efficiently.
6. Open a dedicated business bank account to avoid mixing personal and business transactions, which can complicate bookkeeping and increase costs.
7. If you only need basic financial statements and tax returns, communicate this to your accountant

By following these tips, you can effectively minimise your accounting fees while ensuring that your financial records are accurate and well-maintained. A proactive approach not only saves you money but also increases collaboration with your accountant, leading to better financial outcomes for your business.

Choosing the Right Accountant

Selecting an accountant involves more than just comparing prices. Here’s what to consider:

• Qualifications and Experience: Look for certified professionals (e.g., ACCA, ICAEW) with a proven track record. Verify their qualifications and ask about their years of experience to ensure competence.
• Industry-Specific Expertise: Accountants with experience in your industry understand unique challenges and regulations. This expertise can lead to better financial advice and compliance.
• Scalability and Future Growth: Choose an accountant who can support your business as it grows. They should offer services that scale with your needs, such as advanced tax planning or CFO services.

When you prioritise these factors, you’re more likely to find an accountant who not only fits your current budget but also adds long-term value to your business, ensuring accurate financial management and growth.

Investing in the Right Accountant for Your Business

Choosing the right accountant is a important investment that can impact your financial well-being. It's not just about finding the cheapest option but about partnering with a professional who understands your unique needs and challenges.

PHS Associates are dedicated to providing exceptional accounting services to your specific requirements. They offer expertise in taxation, payroll, and business management consultancy, helping you navigate financial complexities and achieve sustainable growth. Contact us at 0208 8611685 and email at info@phs-uk.co.ukn