Handling your business finances can be tough yet manageable, particularly if you think of working with a CPA or a regular Accountant. Most business people are uncertain about how much to budget for professional accounting services because costs can hinge on a number of factors including the fact that you use a CPA or a standard accountant.

Here, we’ll explain the primary differences between CPAs and typical accountants, explain the price structures and help you budget for your business's accounting requirements.

Difference Between a CPA And an Accountant

First, let us understand the differences between a CPA and a typical accountant. A CPA is an accountant that has passed the CPA examination, met experience requirements and is certified to perform. More specific services are offered to CPAs, including auditing financial statements, representing you before the IRS along with complex tax advice.

Normal accountants, in turn, might lack the certification yet still carry out a lot of the vital functions including bookkeeping, financial analysis and tax preparation. While CPAs charge much more than typical accountants because of their advanced education, both can offer invaluable services based on your business requirements.

Hourly Rates for CPAs & Accountants in the USA

The most popular way that CPAs & accountants charge is by the hour. The typical hourly rate for CPAs is USD 150 to USD 400 an hour, based upon experience and work complexity. Ordinary accountants charge less, typically USD 100 to USD 250 an hour.

The difference in hourly rates could be based on several factors: 

• Location: In case you reside in a big city like New York or Los Angeles you can expect to pay more for accounting services.
• Experience: More experienced accountants and CPAs charge more. But they might complete tasks faster because they are experts, saving you money later on.
• Services Complexity: Easy bookkeeping might be cheaper but services like auditing, business consulting or handling IRS issues could be more costly.

Project Based Rates for CPAs & Accountants in the USA

In case you would like accounting assistance occasionally, such as during tax season - you may hire a CPA or accountant on a project schedule. What this means is you pay a fixed price for a given service, including tax planning and filing.

For personal tax returns, a typical accountant might charge USD 200 to USD 300 and a CPA USD 400 to USD 600. If you need a corporate tax return prepared, it could be more costly. You might have to pay USD 700 to USD 1,000 with an accountant and perhaps much more for a CPA in case your business has complicated finances.

Project-based rates are ideal for companies which do not call for ongoing accounting but want peace of mind in case essential financial tasks like tax filing or an audit occur.

Monthly or Fixed Fees For Ongoing CPA & Accountant Services

In case your business needs continual accounting support, such as daily bookkeeping, financial reporting or payroll management - it might be rational to employ an accountant or CPA on a monthly retainer or fixed fee basis. This particular fee structure makes budgeting less difficult since you understand precisely how much you're paying for financial services every month.

A regular accountant might charge USD 200 to USD 500 monthly for continuous bookkeeping services. In case you work with a CPA, all those fees could be greater - between USD 500 to USD 1,200 plus per month, based on the intricacy of your business's finances and also the services you require.

For businesses that require more complete financial management, CPAs can combine tax preparation, financial reporting, along with strategic financial guidance in one monthly fee. This is more costly upfront but oftentimes delivers better long-term value if you are scaling your business or require innovative financial advice.

CPA Fees for Specialized Services

CPAs offer more specialized services that regular accountants might not provide. For instance, a CPA can help prepare your business for an IRS audit or for auditing financial statements. These services generally cost you far more as the CPA has greater education and the tasks are more complicated.

Forensic Accounting

For companies that require a forensic accountant to investigate fraud or monetary disputes, you will pay between USD 300 and USD 500 an hour. Forensic accountants have advanced skills in accounting or investigative methods and are frequently needed in legal cases.

Business Consulting & Advisory

A lot of CPAs also provide business advisory services, assisting you to improve cash flow, plan for future expansion, or get ready for a transaction or acquisition. The average rate for management advisory services from a CPA is USD 158 an hour, but prices may differ by advice scope.

Accountant Salaries by City in the USA

When you are considering employing an in house accountant rather than outsourcing, you ought to know what salaries to expect. In the United States, accountant wages are decided by city and price of living.

• New York: USD 67,988 yearly.
• Los Angeles: Approximately USD 66,150 a year.
• Chicago: USD 72,336 a year.
• Houston: USD 69,037 a year.
• Phoenix: USD 65,210 a year.

Employing an in-house accountant will offer much more hands-on financial management, though you will also have to budget for benefits, training along with other expenses associated with employment.

Is a CPA Worth Hiring?

While CPAs generally charge more than typical accountants, they add value in expertise, qualifications and also the services they offer. For more complicated tax situations like companies getting ready for audits and those planning for growth, a CPA might be well worth the investment.

But in case your business needs easy financial things like bookkeeping and tax planning, a traditional accountant or accounting software may be cheaper. Numerous small businesses save money on accounting by performing simple accounting work themselves using software like QuickBooks or Xero.

Final Thoughts

How much to budget for accounting services is based on your financial complexity, your long-term objectives and the degree of knowledge required. For smaller sized businesses with easier requirements, budget about USD 2,000 to USD 5,000 a year. But bigger businesses with more complicated structures must budget USD 10,000 to USD 20,000 yearly in case you intend to engage a CPA.

For expert accounting assistance for your business in the USA, turn to The Fino Partners today.