What Types of Companies Need Accounting Help — and How Costs Vary by Business Type
There is more to accounting than just large corporations. Accounting services for small businesses are equally important, as all types of Companies – including sole proprietors, freelancers, and Multi-Entity Firms – need to have their finances organized and managed in such a way that they can remain compliant and maintain a high level of profitability.
The need for accounting support varies greatly depending on the business model, as does the price for that type of support. So in this article, we will review which companies require accounting assistance and the factors that determine the cost of that assistance.
Freelancer/Sole Proprietor
Why Does a Freelancer Need Accounting Assistance?
A freelancer generally begins by tracking their own income and expenses. As their income grows, so will the complexity of properly accounting for that income and expenses. Even freelancers benefit from accounting services for small businesses when transactions increase and tax obligations become more complex.
Common Challenges:
1) Tracking Income and Expenses
2) Managing Deductions for Business Expenses
3) Tax Filing Process
4) Separating Your Personal Financial Accounts from Your Business Financial Accounts
A Minor Error Can Cause Tax Problems or Loss of Deductions.
Typical Costs
Freelancers will typically require:
1) Basic Bookkeeping
2) Expense Tracking
3) Annual Tax Preparation Services.
Cost will typically be lower due to a lower transactional volume.
Typical Monthly Estimated Cost:
Basic Bookkeeping packages are intended for smaller operations
- SME/Small Business
Importance of Accounting Assistance for Small Businesses
Small businesses are often busier than larger businesses because they have a high volume of transactions and usually employ staff. This is where accounting services for small businesses play a critical role in maintaining compliance and financial clarity.
The types of service that need to be provided include:
- Ongoing bookkeeping
- Payroll
- Sales tax/VAT return
- Financial Statements
- Cash Flow tracking
Without proper accounting, small businesses may struggle to meet compliance requirements and lack clear visibility into their overall financial position.
Typical Average Cost Range
Due to the following reasons, the cost of services to a small business will be higher than that of using a freelance bookkeeper.
- Payroll
- A higher volume of transactions
- The need for inventory tracking (if applicable)
Generally, an SME will require monthly accounting assistance rather than just annual assistance.
- Types of Startups
Demanding Accounting Support
Startups require more than just bookkeeping.
They typically also require:
- Financial forecasting
- Budget preparation
- Investor-ready financial statements
- Monitoring of the burn rate
- Documentation of funding
Startups can benefit from outsourcing their accounting needs, as it will provide them with structured financial systems without having to hire a full-time finance team.Many startups begin with accounting services for small businesses before scaling to more advanced financial support.
Typical Cost Range
The accounting costs associated with startups may be higher than the costs of accounting for a typical small business because of the:
- Advisory involvement
- Complexity of reporting
- Strategic financial planning
Nonetheless, outsourcing accounting services will still be more economical than hiring a complete internal accounting team.
- E-commerce companies
The reason they need accounting assistance
E-commerce companies have unique difficulties as stated below,
- large transaction volume
- inventory management
- sales on several platforms
- taxes for countries outside yours
- reconciling payments.
Performing bookkeeping can become very challenging as your e-commerce business grows. Specialized accounting services for small businesses operating online can help manage these complexities effectively.
Accounting costs increase for e-commerce businesses due to the following:
- transaction volume
- tracking inventory
- multiple sales tax regulations
- If applicable, accounting for selling across international borders
Accounting for e-commerce companies typically requires specialized knowledge and skills.
- Development of Medium-Sized Business
The Information Needed to Keep Up with the Growth of the Business
The further a company grows, the more complicated it becomes for them to have their finances in order.
They may be looking for help with:
- Departmental Budgets
- Cash Flow Projections
- KPIs (Key Performance Indicators) of Financials
- Internal Controls
- Consolidated Financial Reports
At this point in their life cycle, many companies can benefit from using an outside company to provide accounting services in conjunction with advisory services.
Typical Expense Range.
The costs of outsourcing your accounting will vary depending on:
- Frequency of Reporting
- The Size of Payroll
- The Level of Compliance
- How Much Financial Analysis Is Needed
However, the expenses associated with outsourcing to an outside accounting firm will generally be less than what it would cost if you maintained an in-house accounting department that had more than one employee.
- Multi-Location / International Companies
Why Do They Need Accounting Help?
Companies that operate in multiple regions:
- Have tax obligations in more than one jurisdiction
- Must be aware of currency requirements
- Report across international borders
- Have complicated payrolls
Professional accounting helps reduce tax compliance risk.
Typical Cost Range
Companies with multi-location or international operations typically need more complex accounting support than other businesses. They may require:
- Senior-level financial oversight
- Assistance in monitoring compliance with local laws and regulations
- Regular reviews of financial performance
Cost is more reflective of complexity than sales.
Why Accounting Costs Vary Across Businesses
In other words, two companies may have similar amounts of revenue but still experience significantly different levels of accounting fees because many different factors contribute to determining an organization’s accounting fees, such as the volume of transactions through their company, number of employees, complexity of business environment in terms of industry, level of regulatory reporting required, compliance risk associated with the business activities and the amount of advisory assistance given by third parties.
Accounting isn’t just priced the same based on business size; it’s priced based on its operational complexity.
Is outsourcing accounting a good decision for every kind of business?
It provides several advantages for nearly all businesses, including:
- More formalized financial management,
- Lower risk of falling out of compliance with regulations,
- Increased clarity of reporting,
- Support that can easily grow or shrink depending on business needs; and
- The ability to access a wealth of talent with expertise in the industry you work in.
Instead of employing an internal accounting department during every phase of your business’s expansion, many businesses use this form of outsourcing as a cost-effective alternative to internal employment.
