When you are running a small business, every dollar matters, and so does every decision. Among the most important choices you’ll make is whether to hire a Certified Public Accountant (CPA), and of course, how much does a CPA cost for a small business?
The answer is that CPA fees can vary widely, but understanding what those fees include, why they matter, and how to choose the right CPA can completely change the financial health of your business. Let’s discuss CPA costs in detail.
Why Small Businesses Hire CPAs?
Before we talk about numbers, it’s important to understand why thousands of small businesses rely on CPAs every year. A CPA isn’t just someone who files taxes; they are trained, licensed professionals who help you:
- Stay compliant with federal and state tax laws
- Maximize deductions and avoid penalties
- Manage cash flow more effectively
- Plan for long-term financial success
- Prepare financial statements and handle audits
- Advice on payroll, bookkeeping, and budgeting
- Build tax strategies that save money year-round
If you want accuracy, peace of mind, and someone who understands your business’s financial health, a CPA is worth considering.
How Much Does a CPA Cost for a Small Business?
CPA cost depends on multiple factors: your business size, complexity, number of transactions, whether you have employees, and the type of service you need. Below is a breakdown of what small businesses usually pay.
1. Hourly Rate: $150 – $450 per hour
CPAs often charge an hourly rate, especially for consulting, tax questions, IRS letters, or strategy sessions. The rate depends on:
- The CPA’s experience and specialization
- The complexity of your situation
- Whether you’re working with a firm or a solo practitioner
Solo CPAs or small firms tend to be more affordable, while large firms charge higher fees due to overhead and expertise.
2. Monthly Bookkeeping Packages: $300 – $2,500 per month
If you want ongoing help, most small businesses pay a monthly fee. This often includes recording transactions, reconciling bank accounts, categorizing expenses, preparing monthly financial statements, sales tax filings, and payroll support (optional add-on).
The cost depends mostly on your monthly transaction volume and whether your books are simple or complex.
3. Tax Preparation Costs: $500 – $3,500 per year
The most common service small businesses request is business tax filing. Prices generally look like this:
- Schedule C (sole proprietor): $400–$750
- Partnership (Form 1065): $900–$2,000
- S-Corp (1120-S): $1,000–$3,000
- C-Corp (1120): $1,200–$3,500
4. Payroll Services: $100 – $500 per month
Some CPAs provide payroll processing or help you manage systems like ADP, Gusto, or QuickBooks Payroll. You may pay:
- Base fee: $50–$150 per month
- Per employee: $5–$15 per employee
- Add-ons like payroll tax filings or workers’ compensation may increase the cost.
5. Advisory and Strategic Planning: $200 – $500 per session
CPAs also offer consulting to help you save taxes. Choose the right entity (LLC vs. S-Corp), plan for growth, understand financial reports, prepare for an audit, and improve profitability.
These sessions are usually billed hourly, but some firms offer bundled sessions quarterly or annually.
Note: These are general average CPA costs. Your actual expenses may vary depending on several factors that may affect CPA costs.
Factors That Affect CPA Costs
Several key factors influence how much a CPA will charge a small business. Understanding these helps you estimate your costs more accurately and choose the right accountant for your needs.
1. Complexity of Your Business
Simple businesses like sole proprietorships usually cost less, while S-Corps, partnerships, or multi-state companies require more work and expertise. More complexity means more time, which leads to higher fees.
2. Number of Monthly Transactions
If your business only has a small number of transactions, the CPA’s workload stays low. But companies with frequent sales, expenses, or transfers take longer to reconcile each month, increasing the cost.
3. Number of Employees
Having employees adds payroll taxes, filings, and year-end forms. A small team costs very little to manage, but as your staff grows, payroll and compliance work grow too, raising the CPA’s fee.
4. Condition of Your Books
Organized, accurate books keep the cost down because the CPA can start immediately. But messy or unreconciled books require cleanup first, and cleanup work is often one of the biggest added expenses.
5. Frequency of Services Needed
One annual tax filing is inexpensive compared to ongoing monthly or quarterly support. Businesses that need bookkeeping, payroll, and regular advisory sessions pay more because the CPA is involved year-round.
6. Industry Requirements
Some industries, like trucking, real estate, medical practices, and e-commerce, have more complex tax rules. CPAs with specialized knowledge usually charge more because the work demands additional expertise.
7. Location of the CPA Firm
CPAs in large cities tend to charge higher rates due to higher operating costs. Many small businesses choose remote CPAs because they often offer the same quality at a more affordable price.
8. Experience and Skill Level
A highly experienced CPA or a larger firm generally costs more than a new practitioner. However, the added expertise often means better tax planning, fewer mistakes, and long-term savings.
Is Hiring a CPA Worth It for a Small Business?
Yes, most small businesses find that a CPA is worth the cost. A good CPA helps you avoid IRS penalties, maximize deductions, and keep your finances accurate year-round. They catch mistakes early, guide you on tax savings, and give you clearer insight into your business numbers.
In many cases, the money saved through proper tax planning and clean bookkeeping ends up being more than what you pay for the CPA, making it a smart and reliable investment.
How to Choose the Right CPA for Your Small Business?
- Choose a CPA who has experience in your specific industry so they understand your needs.
- Make sure their pricing is clear and transparent to avoid surprise fees.
- Pick someone who communicates well and explains things in simple terms.
- Ask what services are included so you know exactly what you’re paying for.
- Check reviews or get recommendations from other business owners for reliability.
