How Much Does an Accountant Cost?

Hiring top accountants can cost small to medium-sized businesses between £60 and £450 per month, depending on your business size.

Preparing financial statements, overseeing payroll, and handling bookkeeping, hiring an accountancy firm can free up business owners to focus on running and growing their company.

In this article, we’ll explore all the costs associated with UK accountants and what to consider when selecting accounting services.

How Much Do Accountants Cost?

The number and type of accountancy services a business needs – and therefore the overall cost of an accountant’s services – will depend on its size and business structure.

More comprehensive accounting can cost between £60 to £450 per month. For large businesses, this number will be higher (around £600) as they have a higher number of employees and a bigger turnover – factors that can impact the cost of your accounting.

Accountants are often paid annually or monthly depending on the number and type of accounting services you need from them. If you need regular and varying accountancy services and advice, you can opt for a package, which you pay for monthly or annually.

You may also opt to pay an accountant for one-off services. In this case, you will be paying the accountant by the hour. In general, one-off accounting will cost around £25 to £100 an hour, and more specialist accounting costs around £125 to £250 an hour. However, some accountants also have a flat fee for certain tasks. We’ll dive into some specific prices for different services below.

How Much Do Different Accountancy Services Cost?

Here are cost estimates for paying an accountant a one-off fee for a respective service.

Note: All prices exclude VAT and may vary depending on case complexity and business size.

It’s worth noting that the above services will typically be included in most accounting packages for businesses. A holistic package could be more beneficial, both financially and logistically, if your business requires multiple services at once.

Still, if you run a start-up or small business, you may not need regular or extensive accountancy service packages. But as your business grows, your tax and accountancy needs will grow too, and become more complicated. You can then choose to scale up to a regular monthly package.

What Are the Factors Affecting How Much Accountants Charge?

There are a few factors that will impact how much your accounting services cost, including:

The size of your business

This is determined by your annual turnover. The higher this is, the more you can expect to pay – after all, the tax and accounting workload placed on your accountant will be higher. For example, the cost of maintaining your business accounts depends on your monthly turnover.

Complexity of financial transactions

Related to this is the complexity of your finances. Businesses with intricate financial activities or multiple income streams may incur higher fees due to the increased workload for the accountant.

This tends to be correlated with business size but not always. For instance, a company working with international taxation, specific regulations, multiple currencies or detailed contract clauses is going to have more complicated needs than others.

Being a limited company

If you’re registered as a sole trader, your accounting costs will be lower than those of a limited company. Limited companies have more complex needs and have to comply with harsher accounting rules. Bookkeeping is much more stringent and comprehensive, for instance, so the cost may be higher. Limited companies will also need other services, such as tax accounting.

One-off or continuous service

In the long run, hiring an accountant every month or quarterly will work out cheaper and many different services will be included in the one package. Accountants working for you regularly will also be able to discover areas where you can save money, as opposed to a one-off basis where they won’t be able to spot these kinds of things.

Location in the UK

Accounting fees can vary by region in the UK, with services in larger cities like London typically costing more.

Can You Get Accounting Services for Free?

The short answer is yes. You can access accounting services for free through DIY methods, or free software. Cloud-based software has evolved to produce efficient and helpful tools to assist you with services such as bookkeeping and payroll.

Still, DIY accounting isn’t suitable for every business and has varying pros and cons that are worth considering compared to professional accountancy. Here’s a quick rundown.

DIY accounting: What could it cost you?

With DIY accountancy, the overall cost is a little harder to calculate. That’s because instead of paying one firm or accountant for particular tasks, you are taking on the work yourself usually via software, apps, and educational resources. Here are some direct costs you may need to consider:

• Accounting software: There are free accounting tools available, such as Wave Accounting, which offer basic functionalities suitable for very small businesses or sole traders. But typically, you may need more comprehensive solutions like QuickBooks, Xero, or Sage to provide advanced features. Subscription costs typically range from £10 to £50 per month, depending on the package and functionalities you require.
• Payroll software: If you have employees, you’ll need payroll software to manage salaries, taxes, and deductions. Costs can range from £5 to £30 per month, depending on the number of employees and features.
• Expense tracking apps: Tools like Expensify or Receipt Bank help in managing receipts and expenses. These can cost around £5 to £15 per month.
• Training and educational resources: Investing in learning materials, such as books, online courses and more, to understand accounting principles and tax laws can cost between £50 and £500, depending on the depth of content. Attending workshops might cost £100 to £300 per session, for instance. However, if you just need a guide on using relevant software, you may find or receive a webinar for free.

You may also face indirect costs, such as the lost time you spent learning and managing the accounting side of your business over other areas. Equally, should you make a financial error, miss a deadline or face an audit, you could get a penalty, fine or other fees which might make the savings of using a DIY method over a professional one obsolete.

DIY accounting vs hiring a professional accountant

An easier method of assessing the benefits and downsides of DIY accounting and professional accounting is to compare them directly.

When to consider DIY accounting?

Ultimately, not every business will be suited to DIY accountancy (unless you are a trained accountant yourself. Here are a few points we think your business and you should hit if you are to try DIY accounting:

• Startups and micro-businesses: If you’re a sole trader or running a very small business with straightforward finances, DIY accounting may be sufficient, especially if you have a tight budget.
• Simple financial activities: Businesses with minimal transactions, no employees, and simple income streams might manage without professional help.
• Basic compliance requirements: If your industry has minimal regulatory requirements and a low risk of audits, DIY accounting could be adequate since you won’t be as likely to get hit with expensive fines.
• Willingness to learn: Of course, you’ll need to be comfortable learning accounting principles and staying updated on tax laws for your respective industry, as well as being capable of handling (and perhaps even enjoying) financial tasks.

When to consider hiring a professional accountant?

For most businesses then, hiring a professional accountant is the better call. Here are some reasons you may want to consider professional accountancy over DIY use:

• Business growth: As your business expands, the volume and complexity of financial transactions increase, making professional assistance more valuable. If you require strategic financial planning, budgeting or forecasting to guide business decisions, professional help can also be a major boon.
• Complex financial activities: If you deal with multiple income streams, international trade or complex contracts, an accountant’s expertise becomes essential.
• Time constraints: When administrative tasks start to consume time better spent on strategic activities, outsourcing becomes advantageous. That could be particularly important at specific times of the year, such as towards the end of the current financial year in April 2025.
• Regulatory compliance: Industries with stringent compliance requirements benefit from professional guidance to avoid penalties.

Need Help Finding an Accountant?

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