Most small business owners spend more time stressing about taxes and bookkeeping than actually running their business. Understanding what's bundled into accounting services can save you thousands and help you choose the right provider for your needs. Let's break down exactly what you're paying for.
Core Bookkeeping Services
Bookkeeping is the foundation of any accounting package. This includes recording daily transactions, categorizing income and expenses, reconciling bank statements, and maintaining your general ledger. Most providers charge $200–$500/month for basic bookkeeping, depending on transaction volume and complexity.
The goal is accuracy—ensuring every receipt, invoice, and payment is logged correctly so you have a clear financial picture. This work typically happens monthly, with reports generated by the 15th or end of month, depending on your provider's standard turnaround.
Financial Statement Preparation
Accountants prepare three key financial documents: the income statement (profit and loss), balance sheet, and cash flow statement. These aren't just for your eyes; banks often require them for loans, investors want them before funding, and you need them to understand business health.
Expect this to be included in monthly accounting packages ($300–$800/month tier), though some providers charge separately for quarterly or annual statements. If your business is simple—say, a single-owner LLC with straightforward income—statement prep is faster. Corporations and multi-stream businesses typically cost more.
Tax Planning and Filing
This is where accounting gets strategic. A quality small business accountant reviews your year-round finances to identify deductions you've missed and structure transactions to reduce tax liability. They then file your business tax return—whether that's a 1040 Schedule C for a sole proprietor, a corporate 1120, or partnership return.
Tax prep ranges from $500–$2,500 depending on entity type and return complexity. A self-employed consultant with simple deductions pays less than an S-corp with employees and payroll. Many accountants build this into an annual fee (separate from monthly bookkeeping) or include it as a yearly service without extra cost if you're a monthly client.
Payroll Services
If you have employees, someone needs to calculate gross pay, withhold taxes, file payroll taxes quarterly, and produce year-end W-2s. Some accountants handle this in-house; others integrate with third-party payroll software like Gusto or ADP.
Payroll processing typically costs $30–$100 per employee per month, depending on frequency and complexity. If you're considering hiring your first employee, clarify whether your accountant includes payroll or if you'll need to subscribe separately—this affects your total monthly cost.
What's Usually NOT Included
Here's what to ask about explicitly:
- Bookkeeping software licenses – Some accountants use their own platform; others charge $50–$150/month for software access
- Year-round tax advice – Many provide this, but some only advise during tax season
- Business consulting – Strategic decisions about pricing, structure, or forecasting often cost extra ($150–$300/hour)
- Audit or review services – Beyond compiled financials, these cost $2,000–$10,000+ annually
- Retirement plan setup – SEP-IRA or Solo 401(k) establishment may be an add-on fee ($500–$1,500)
- Sales tax compliance – Multi-state sales tax filing sometimes requires additional service
How to Compare Providers
When evaluating accountants or firms, ask for a service menu that specifies what's included in each tier. Request pricing for your specific situation—transaction count, number of employees, state complexity—rather than generic quotes.
Mercoly lets you compare trusted small business accounting providers side-by-side, so you can see exactly what each includes, check reviews, and find someone matching your budget and needs in one place.
Also clarify response time. Does your accountant answer questions same-day, or do you wait a week? For a growing business, responsiveness matters.
Frequently Asked Questions
Q: Should I hire a bookkeeper and a CPA, or can one person do both? One skilled accountant can do both for a small business; many specialize in exactly this. Separating roles makes sense only if your business has high transaction volume or complex compliance needs, which usually means annual revenue above $1–2 million.
Q: What's the difference between a CPA and a regular accountant? A CPA has passed licensing exams and meets education requirements; they can sign tax returns and offer more credibility with lenders and auditors. For basic small business accounting, a good non-CPA accountant may be sufficient and cost less—though CPAs are worth it if you need audit-ready statements or complex tax planning.
Q: Can I switch accountants mid-year? Yes, but plan for the transition. Your new accountant will need access to prior-year records and may need 2–4 weeks to get up to speed, so avoid switching right before tax deadline.
Start comparing providers today to find the right fit for your business.