Accounting Costs for Small Businesses
Updated: July 26, 2022
How much do bookkeepers and accountants charge for their services? As usual, the answer is it depends, but this article will provide information on the traditional hourly billing method as well as how we price our services here at Avalon.
Read on below or let Joe explain how much bookkeeping and accounting costs in this video.
What is the Difference Between Bookkeeping and Accounting?
To understand pricing, it's helpful to know the difference between bookkeeping and accounting. These two terms are often used interchangeably, but there is a significant difference between bookkeeping and accounting services.
Bookkeeping
We have written in detail about what a bookkeeper does in Canada, but the very basic function of a bookkeeper is to record the transactions of a business in a consistent way. This includes:
- Recording financial transactions and reconciling accounts at the end of each month or week
- Recording and paying bills on their due date
- Creating and issuing invoices
- Processing and recording payroll
- Tracking sales taxes (GST / HST / PST etc.), and filing returns
The bookkeeper is in charge of making sure that all transactions are recorded accurately. The complexity of this job depends on the size of the business, number of transactions to be recorded, and the nature of those transactions.
Accounting
Accounting can be described as processes that use the information recorded by the bookkeeper to produce higher-level information and reports. Examples of these services include:
- Preparing adjusting entries to record information such as inventory adjustments, tax estimates, and other accruals (expenses that have occurred but aren’t yet recorded by the bookkeeper)
- Preparing and analyzing financial statements to help the business owner make decisions
- Completing income tax returns
- Tax planning
- Business advisory
Accountants aim to provide business owners with an understanding of their financial reporting to drive intelligent, informed decision making. They also play a key role in reducing taxes where possible. At Avalon, we also add empathy and even emotional support to the role of an accountant; it can be a lonely road running a business, and we want to help entrepreneurs thrive however we can.
Traditional Costs of Bookkeeping and Accounting (Billed Hourly)
The traditional and most common method of charging for bookkeeping and accounting services is using an hourly rate. The bookkeeper or accountant will track the time they spend on your business in increments of 0.1 hours, add up the time spent and then apply their hourly charge-out rate. BOOM, there’s your bill! This means that you are on the clock anytime your bookkeeper or accountant answers your phone call, responds to your email or works on your file in any way.
At current market rates, you’ll find a range of hourly rates:
- Bookkeepers charge between $30/hr and $90/hr
- Accounting work completed by a CPA, you’ll find a range of $150/hr to $450/hr
This means that the bill for services provided will vary depending on how long it took your bookkeeper or accountant to complete those services. Based on current market rates, you’re likely to see the total cost for services fall within the following ranges:
Bookkeeping
- Startup Business - $150 to $400 per month
- Small Business - $400 to $600 per month
- Medium Business - $600 to $2,000 per month
- Large Business - $2,000+ per month
Accounting
- Compilation engagement and corporate tax return $2,000 - $4,500
- Review engagement and corporate tax return $3,500 - $8,000
- Audit engagement and corporate tax return $4,500+
Not sure what compilation, review and audit engagements are? Find out here.
Under the traditional method, you won’t know the amount of your bill until the work is complete and the service provider has added up all of the minutes spent working on your file. Although this is a common pricing method, we find a couple of things wrong with it:
- Fear of asking questions - It creates a situation where clients feel that they shouldn’t ask questions or learn from their bookkeepers and accountants because they will be on the clock as soon as the phone is answered. We want to foster an environment where clients get to ask questions without worrying about the resulting bill.
- Surprise bills - It can also cause surprise bill amounts when more work was required than expected. Surprise bills kill cash flow for businesses and create animosity between accountants and their clients.
Simplify and Automate Your Bookkeeping
If the cost of paying a bookkeeper is a bit too steep, there is always the DIY bookkeeping option.
Our comprehensive online course gives you Avalon’s proven processes to take the pain out of bookkeeping using modern tools and processes.
In less time than it takes to watch the Lord of the Rings Trilogy,
You’ll learn:
- Our most valuable tips on how to to easily do your own bookkeeping
- How to keep bookkeeping simple so you avoid making mistakes and stay on track with your bookkeeping
- Insider tricks to automate as much of your bookkeeping as humanly possible
- Avalon’s tried and tested bookkeeping procedures to cut your bookkeeping time in half
- Simple steps to keep the tax man happy if you’re ever audited
- How to create and see through your financial statements like Neo in the Matrix so you can understand exactly how your business is performing
- Expert methods to ensure you don’t miss any tax deductions available to your business
And a whole lot more!
For a limited time we're offering our blog readers 25% off the regular price of this comprehensive course.
Just use the coupon code AVABLOG25 to receive 25% off on checkout.
Plus there is a 100% money back guarantee.
If you're not satisfied after completing the course, just reach out and we'll give a full refund with no questions asked.

How Much Does Avalon Charge for Bookkeeping and Accounting?
Now that we've explained why we don't like the traditional model, let's look at how we price our services at Avalon.
We will get to price ranges and examples below, but first, we should explain how we price our services.
We agree upon a fixed price with prospective clients before beginning work. This pricing method allows us to stop worrying about inputs and start talking about results: making efficient processes and delivering relevant information.
We use a pricing model that lists out all of the services that we provide and the cost of each piece. This way, we can provide detailed quotes and our clients can choose the exact level of service that is right for them at any given time. Let’s look at a few examples and the cost of each. These examples are all technically small businesses, but we’ve labelled them “Startup”, “Small”, “Medium” and “Growing” for the purpose of this demonstration.
Startup Business
Often, businesses that are just starting out need help with a few compliance-based services but don’t have the revenue yet to pay a bookkeeper and accountant to look after all finance related tasks within the business. A common service level for this type of business includes:
- Accounting system setup and training - we can help you to set up your cloud accounting system and teach you how to efficiently complete your bookkeeping.
- Ongoing support for bookkeeping and accounting - we can be available to help with bookkeeping and accounting questions throughout the year.
- Year-end financial statements and corporate tax return - we prepare your year-end financial statements and tax return.
- Help as needed - we're here to help with questions and guidance as needed
The cost for this package is:
- Systems setup and one-on-one bookkeeping training - billed hourly
- Annual year-end tax filings - billed hourly
- Guidance with questions as needed - billed hourly
Small Business
We see a lot of small businesses that have annual revenue between $200k and $350k, that have 1 or 2 employees and are owner managed. We love working with these types of businesses because the owners are often highly involved and passionate about what they’re doing. Because of the high owner involvement, they often need a few more of the financial duties looked after so that they can focus on what they are good at. A common service level for this type of business includes:
- Accounting system setup and training - we set up your cloud accounting system and teach you how to efficiently complete your bookkeeping.
- Accounting software subscription costs - we cover the cost of the accounting software.
- Ongoing support for bookkeeping and accounting - we will check in monthly to make sure things are going well. Also, if you have questions, call or email us!
- Year-end financial statements and corporate tax return - we prepare your year-end financial statements and tax return.
The cost for this package is:
- $2,000 for systems setup and one-on-one bookkeeping training
- From $500 per month (includes software fees and year-end costs billed monthly)
Medium Business
In this common scenario, we see businesses that have revenue in the $350k to $$750k range, they often employ 3 to 10 people, the owners are still involved in the day to day but are focusing on growing the business, perfecting their services or products and training employees. This business owner needs insight into what is working in their business and what could be improved or changed. Solid monthly reporting that includes insight from an outside advisor is a key success factor here.
- Accounting system setup and training - we set up your cloud accounting system and teach you how to submit documents electronically and view reports.
- Accounting software subscription costs - we cover the cost of the accounting software.
- Monthly bookkeeping - we record monthly transactions and send out useful financial reports once per month. Also, if you have questions, you can still call or email us anytime!
- Sales tax filing - we file the GST and/or PST returns
- Year-end financial statements and corporate tax return - we prepare your year-end financial statements and tax return.
- Payroll system setup and support - we set up your payroll system, teach you how to process payroll, onboard and offboard employees as needed, and prepare employee T4s on an annual basis. We’re also available to answer questions as they come up.
The cost for this package is:
- $1,500 for accounting and payroll systems setup (one-time cost)
- From $800 per month (includes software fees and year-end costs billed monthly)
Growing Business
As businesses grow, there is often an in-between size where they are not yet large enough to have their own internal finance department but are complicated enough that just hiring a bookkeeper on Craigslist won’t cut it.
We usually see this scenario with organizations that are growing and have revenue between $750k and $2million who employ between 10 and 20 people. For these growing organizations, we can act as an outsourced accounting department either indefinitely, or until the business grows large enough to hire an internal accountant. In cases where the business grows into needing an internal accountant, we are there to help with training and transition to make sure things go smoothly.
- Accounting system setup and training - we set up your cloud accounting system and teach you how to submit documents electronically and view reports.
- Accounting software subscription costs - we cover the cost of the accounting software.
- Monthly bookkeeping - we record monthly transactions and send out useful financial reports once per month. Also, if you have questions, you can still call or email us anytime!
- Monthly management accounts - Each month you will receive a customized reporting package that includes our analysis and commentary on the monthly performance, as your external trusted advisers.
- Sales tax filing - we file the GST and/or PST returns
- Year-end financial statements and corporate tax return - we prepare your year-end financial statements and tax return.
- Payroll system setup and processing - we set up your payroll system and process your payroll each period, onboard and offboard employees as needed, and prepare employee T4s on an annual basis. We’re also available to answer questions as they come up.
The cost for this package is:
- $2,000 for accounting and payroll systems setup
- From $1,200 per month (includes software fees and year-end costs billed monthly)
These examples have been chosen as common scenarios to show a range of costs and services that we offer, but it’s not an exhaustive list of our services. We’re happy to have a chat to scope out the services that would best suit your business and provide a quote. We can mix and match any of our services that your business needs.
Check out our services pages to find out more!