How Much Does It Cost to Hire an Accountant in the UK in 2024? All You Need to Know

Ryan Patrick

• 9 min read
How Much Does It Cost to Hire an Accountant in the UK in 2024? All You Need to Know

Whether you run a small business, are a self-employed professional, or are in charge of a rapidly expanding company, employing an accountant is an important first step towards making sure your company is successful financially.

This article provides comprehensive information about the cost of employing accountants in the UK in 2024, the various price ranges for doing so, the factors influencing the costs, and the advantages of working with experienced accountants for small businesses.

First off, let’s talk about the differences between bookkeeping and accounting before getting into the cost of employing an accountant. Although they are related, they are not exactly the same.

Accounting vs. Bookkeeping

Organising and documenting financial transactions, including receipts, bills, and invoices, is the task of bookkeeping. Accounting however entails the interpretation and analysis of financial data in order to make well-informed decisions regarding a business’s financial health.

Although bookkeepers might be less costly than accountants, they may not be able to offer the same level of analysis, strategic counsel and insight.

Factors Affecting Hiring Cost of Accountants

Hiring an account depends on various business factors. If your company is a sole proprietorship, for instance, its accounting requirements will differ from those of a limited company.  Accountants do not charge the equal fees to all organisations, due to the following factors which has a big impact on their costs:

1. Size and Structure of Your Business

There are various kinds of businesses. Bookkeeping, payroll, and tax planning are examples of fundamental accounting that can be used to manage smaller companies efficiently. Larger companies, however, require more complex accounting services.

The accountant’s fees are impacted by this level of complexities. In other words, an accountant’s fee increases with a company’s size and Accounting requirements. Small business accounting charges can range from £60 to £450 per month, while bigger companies could spend £300 to £ 1000  or more monthly.

2. Complexity of Financial Transactions

Due to their increasing complexity, large-scale companies usually demand specialised accounting services, and vice versa. When dealing with numerous currencies, multiple customers, and various geographical and legal jurisdictions, transactions become more complicated.

Small firms can hire accountants for a lot less money than more established companies since their accounting needs are simpler than those of larger businesses.

Accounting professionals with specialised knowledge in specific area are needed for complex accounting procedures. You may have to spend more for accounting services if your company requires complex financial management.

3. Location of the Business and Accountant

The cost of hiring accountants is influenced by the cost of living in a specific area, the state of the economy in that location. For instance, accountants in London may charge more than those in Manchester or other smaller cities. This is due to the higher cost of living and higher demand for their services. Regional cities like Manchester, Birmingham, and Edinburgh may have cheaper accounting fees than London, but they are still more expensive than smaller towns and rural areas.

Specified Types of Accountants and Their Prices

Your business might need the specific expertise of various specialist accountants, like Chartered or Management Accountants. Each comes with its own set of unique services and pricing patterns.

1. Chartered Accountants

In the accounting industry, chartered accountants are highly esteemed due to their thorough training and dedication to lifelong learning.

Chartered accountants are qualified to handle a wide range of financial responsibilities, including company consulting, tax advising, auditing, and more. They are the perfect partners for companies looking to expand and achieve financial stability because of their wide range of skills and diligent work ethic. Choosing to work with a chartered accountant is essentially making the decision to make well-informed decisions and engage in strategic financial planning.

You should anticipate that chartered accountants will be at the top of the price pyramid A chartered accountant’s hourly rate may range from £80 to £500.

2. Management Accountants

A management accountant is your go-to financial guidance; they are vital in helping you translate complicated financial data into insights that can be put to use as these experts provide a unique set of abilities that enable companies to make well-informed financial decisions.

They go beyond simple math calculations to include interpreting the results within the larger framework of your company plan. A company’s financial objectives are largely guided by management accountants, who place a strong emphasis on budgeting, performance analysis, and future projections. They are the unsung heroes that work in the background to make sure your company succeeds in the industry and not just survives.

Their fees also vary widely; normally, they charge between £50 and £300 per hour.

Top 6 Reasons Why Accounting is Important

Here are some potential reasons why accounting is important

1. Keeping a record: detection and prevention of fraud

The ability of accounting to help organisations maintain an organised record of their financial data is one of its main benefits. The owners wouldn’t know if they are profitable without this information. Preventing and identifying fraud also involves maintaining precise financial records for a company. Internal control, which results from accurate records of all corporate transactions, accomplishes this.

2. Budget planning

A crucial component of any organisation is budgeting. Creating a budget enables companies to plan, track spending, and strive for profitability. Hiring an accountant’s and an upkeep of financial data makes this possible. Entrepreneurs can use this data as a foundation for their budgeting and planning.

3. Assisting decision making

Accounting is a major factor in company decision-making. The conclusions of an accountant are used by those in charge of organising, planning, and managing an organisation to fulfil their responsibilities. They wouldn’t be able to make the important financial decisions that result in a profitable company without these figures.

Making decisions can involve selecting whether to grow their company geographically, hire more staff, or change how it operates in an effort to increase efficiency.

4. Tax compliance

It is imperative for entrepreneurs to adhere to legal and regulatory requirements, and an effective accounting system guarantees that they can. The laws that businesses and organisations have to abide by and are enforced by the government are known as statutory compliance. An accountant will take care of obligations like income tax, sales tax, pension funds, VAT, and more to make sure these rules are being observed. There may be fines and even jail time for not recording and paying these obligations on time.

5. Evaluating the performance of your business

Businesses owners can better comprehend their company’s financial situation and performance by consulting its financial records. Current accounting records enable business owners to monitor expenditures, identify warning indications of impending financial loss, and contrast current information with historical data.

6. Growth and Expansion

Accountants can assist companies in developing growth and expansion plans by seeing opportunities and assessing the costs associated with taking on new projects.

Qualities of a Good Accountant

A standard set of accounting skills does not exist. Throughout their work, certified accountants pick up these abilities. They are not exclusive to this work. Accounting expertise is required of accounting professionals. Soft skills like communication and leadership set job hopefuls apart. Nonetheless, the following list offers advice from experts in accounting, encompassing both hard and soft skills.

1. Accuracy and attention to detail

Reports are a regular element of an accountant’s work. These reports need to be precise. Any error could have disastrous consequences, including significant financial losses or even legal action. For this reason, time management and attention to detail must be discussed.

The accounting industry demands a high level of technical proficiency. Eventually, the public, the government, or tax officials may come into possession of some of the information that accountants manage. Hence, ensuring the accuracy of this information is of utmost importance.

3. High Numeracy and Analytical Skills

The majority of an accountant’s work will involve numbers and tables, and while they will have access to specialised software, they still require a high level of proficiency with numbers. In addition, they must prepare reports, manipulate data, present information, check for errors, and reconcile.

4. Business Experience

An understanding in a company’s basic business processes will be beneficial to accountants as well as they will be able to identify any odd data points and have a deeper understanding of the data they work with as a result.

5. Fulfilling Deadlines while Operating Under Time Constraints

Almost all company functions depend on meeting deadlines. For the accounting department, it can signify something else, though. Registered businesses are prohibited from postponing regulatory reports or significant tax-related information. This has special relevance. For internal use, the accounting department must also send reports on a regular basis. If these reports are not submitted on time, it may have a major impact on the company’s business operations.

6. Tech Savvy

It is not possible nor even required to manually handle the enormous volume of data that an organisation generates. For record keeping, data administration, and storage, much of the labor-intensive work is done by enterprise solutions and specialised accounting software.

The programme is capable of doing simple checks. Standard financial reports and statements can also be produced by it. Such software can simplify accountants’ lives and enhance the quality of reports they provide. Possessing the technical know-how to maximise these tools and being up to date with all the newest features available on the market can be a valuable ability.

The Average Price of an Accountant

Here are the average price of an accountant

1. Hourly Rates for an Accountant

If you need an accountant right away and bookkeeping isn’t the biggest concern, they can charge you between £35 and £60 per hour.

Average hourly cost of accounting

  • Average hourly cost        -  £35 - £60
  • Minimum hourly cost            - £15
  • Maximum hourly cost           - £150+

2. Daily Rates for an Accountant

If the accountant is needed around the clock to help you with your accounting, budget between £300 and £700 per day. Tasks like year-end adjustments and the creation of corporate financial statements are typical examples of this.

3. Monthly Accounting Rates

The monthly rates range from £100 to £500+, depending on the accounting services your company needs. It is also dependent upon the complexity of the task and the accountants’ level of participation. Typically, the monthly package charges correspond exactly to the size of your company. Consequently, for comparable services, larger enterprises are charged more, while small businesses pay less.

The ideal option for small enterprises is a monthly plan because it keeps your financial records up to date.

Average monthly accounting cost based on business size:

  • A Sole trader                - £100 - £150
  • A start up business  - £300 - £400 (plus VAT)
  • An Established business  - £500 - £1,000 (plus VAT)

One-Off Fees for an Accountant

Not all accountants follow a strict routine. An accountant may charge a flat price, which ranges from £100 to £300, depending on the intricacy of the work, to complete one-time or yearly tasks like a self-assessment tax return.

The Remote Revolution: The Cost of Hiring a Virtual Accountant

An offshore setup allows an outsourced virtual accountant to work remotely and offer services to organisations. They have access to the equipment and software needed to finish the task at hand thanks to the virtual working model.

Today, virtual accountants who possess practical expertise and are either self-employed, highly trained freelancers, or professionals from accounting outsourcing firms are employed by the majority of businesses worldwide.

Factors Determining the Cost of a Virtual Accounting

Reducing expenses is always crucial when working with mid-sized and small enterprises. Therefore, hiring a virtual accountant to complete the work is always a smart and sensible move. However, before engaging a Virtual Accountant, some crucial information needs to be taken into account.

To understand better, a virtual accountant’s cost primarily depends on various essential factors like:

  • The kind of work that virtual accountants are capable of performing
  • The experience and credentials of an accountant
  • The service provider’s geographical location
  • The project’s anticipated duration and
  • the range of tasks assigned.

Tips on Minimizing on Your Accounting Costs

Finding the best deal is only one aspect of it; another is establishing a balance. Here are a few useful suggestions for cutting costs without compromising quality.

1. Be Organized

Since every minute is paid for, you can reduce the number of hours an accountant bills you by keeping your financial documents current and staying organised.

2. Make Use of Technology

Purchasing accounting software can simplify a number of procedures and reduce the amount of manual labour that takes up an accountant’s day. Furthermore, the shift to the digital domain fits well with the revolution of remote work that we discussed previously.

3. Minimize Consultations

Even while it’s important to stay in communication with your accountant, not every question calls for a lengthy discussion. Simple inquiries can often be answered with a fast phone call or email, avoiding the need for drawn-out and expensive consultations.

Final Thought

The size of the accounting firm, the experience and skill of the accountant, the complexity of the services needed, and the location of the business are some of the variables that affect accounting fees in the UK. Comprehending these variables and the customary expenditures linked with engaging an accountant is imperative for making well-informed choices.

While cost is an important consideration, businesses should prioritize competence and reliability when selecting an accountant. By choosing an accountant with the right qualifications, experience, and industry knowledge, businesses can ensure that their financial needs are met effectively and efficiently. If you have any questions on how much it cost to hire an accountant in the UK in 2024, don’t hesitate to contact us, and we’ll do everything we can to help.