How Much Does a CPA Cost?

For creative entrepreneurs and business starters, one of the things you’ll probably be wondering is, how much does a CPA cost? The finances of a new business can be quite challenging and confusing, especially without a background in accounting. With that, you’re likely to turn to a financial professional to help.

One of those key financial professionals for your new business, is a CPA, a Certified Public Accountant. With a CPA at your side, the difficult and confusing elements of tax, reviews, and more can be handled professionally. A CPA can deal with your bookkeeping and accounting management too. So, let’s go over a few questions first;

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What is a CPA?

A CPA is not a title for a business like a CFO (Chief Financial Officer) but rather is a Certified Public Account. A Certified Public Accountant is an earned certification that demonstrates an accountant’s knowledge in the field of taxes, audits, business analysis, and compliance.

These certifications are earned through business courses that take several years to complete. After those courses, a CPA is required to take a nearly four-hour exam in order to attain the title of Certified Public Accountant. Once that title is attained through passing that exam, a CPA still has to keep an up-to-date knowledge of the yearly business taxation and regulation, along with much more.

When this certification is earned, it shows a knowledge of all major elements of accounting. Not only that, but it shows that the accountant has the highest ethical and professional standards. As a result, most businesses look for CPAs specifically when they’re trying to find an accountant or accounting and bookkeeping services for their business.

What Does a CPA Do For a Small Business?

So after all of that, you might be wondering what a CPA does, especially for a small business. The role of a Certified Public Accountant can vary from state to state, and business to business, depending on your financial needs, but there’s no shortage of tasks that they can accomplish;

  • Planning For Taxes
    • CPAs have an advanced knowledge of taxes on both a state and federal level for planning and filing.
    • Tax returns, such as payroll returns, income returns, and sales and use returns are important topics for CPAs. Their annual training requires them to keep up-to-date on the changes to tax return laws.
    • While it can vary from situation to situation, the National Society of Accountants reports that it will generally cost $154 an hour to hire a CPA for their tax service.
  • Advisory and Consultation
  • From business to government, people will go to Certified Public Accountants for their advice in all areas of accounting, be it increasing profit and revenue, or finding funds.
  • Certified accountants are also brought in to help investigate or dispute litigations. These specific issues, forensic accounting such as this can cost anywhere from $300 to $500 per hour.
  • Some firms will offer consultation along with traditional accounting services as a unit. Outside of that, however, it can cost an average of $158 per hour, according to the National Society of Accounting.

While these are the main functions of a CPA, there are many other things that a CPA is capable of depending on the firm and accountant. There are some firms and accountants that offer technological consults and software, estate planning, and more. Many offer bookkeeping and accounting management too. All of this can vary from firm to firm, so be informed before making any decisions.

Is a CPA Worth It For You?

For a small business, or an entrepreneur looking to start their business and maximize cash flow, you’re probably asking yourself if a CPA is worth the asking price. While there might be a more upfront cost to a good CPA, it can save you money down the line. They can show tax-credit opportunities, prepare you for growth, and organize financial statements, which are key if you plan on taking on investors and loans.

A CPA is worth it for you if you’re in any of these situations;

  • Your business has a more complicated tax situation;
    • If you do or plan to take business tax credits, such as the Alternative Fuel Vehicle Refueling Property Credit or the New Market Credit, or any number of other Tax Credits you may need a CPA to help properly file these with the IRS
  • Your goal is to take your company public;
    • As mentioned, if you want to take your company public, you’ll need your financial statements in order for investors and legislators to look over.
    • There’s also a set of rules in the United States, such as the GAAP, that CPAs are educated on, that you’ll need to abide by if you take your company public.
    • A CPA can also prepare for all of the requirements for an IPO, an Initial Public Offering for public companies.
  • You are in need of in-depth advice;
  • If you’re having trouble with a government body, specifically the IRS, a CPA, tax attorney, or an enrolled agent are the only people that can represent you in that instance.
  • In situations where you’re in an unknown or confusing financial situation, CPAs offer advisory and consultation to help you.

The Quality of a Good CPA Vs. The Cost

From all of that, it’s easy to see the benefits of having a good CPA. Now, if your business is a more straightforward transactional small business, you might be better served by an accounting software. If you’re in the situations that have been discussed, or you’re looking to establish an early and productive relationship with a Certified Accountant for proactive advice and planning, it might be best to start looking for a CPA. With all of that information, hopefully, you don’t need to wonder; what does a CPA cost?

Conclusion: How Much Does A CPA Cost?

The bottom line is that the upfront cost of a CPA is well worth it in the long run with the amount of money they will save for you.  Companies such as Startup Tandem offer a variety of financial services that can make the cost of hiring them well worth it for you as you improve cash flow and save money.  You can take a look at some of their services here or reach out to them for a free introductory call. Startup Tandem is your go to financial consultant for your startup! They offer a variety of financial and CFO consulting services.

We hope you now understand exactly how much does a CPA cost and we wish you all the best.