Running a small business in Australia is no small feat. 

Between managing cash flow, keeping customers happy, and staying on top of tax obligations, it’s easy to feel stretched thin. 

You might be grappling with the question: Is hiring an accountant worth the cost? 

Dive in with us to know. 

Why Consider an Accountant for Your Small Business?

Small business owners can do a lot of things, but crunching numbers might not be your strength or your favourite task. 

An accountant does more than just your taxes. 

They can help you make sense of your finances, save time, and potentially save money. 

Here’s why hiring an accountant could be a boost to your business:

In a discussion paper released by the Productivity Commission and prepared by the Chamber of Commerce and Industry of Western Australia, small businesses spend an average of 18.5 hours per week in complying with existing laws and regulations. 

This includes tax preparation and bookkeeping. 

An accountant can take these off your plate, freeing you up to focus on growing your business.
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The Australian Taxation Office’s (ATO) rules are complex and mistakes can lead to penalties. 

In its random enquiry program, the ATO found that 30% of small businesses tried to submit a correct report but made mistakes due to different factors such as poor record keeping, carelessness and complexity of the law and tax obligations. 

A qualified accountant ensures your returns are accurate and compliant.
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Accountants provide insights into cash flow, profit margins, and expenses. 

For instance, they can identify deductions you might miss like work-related travel or home office expenses, which the ATO allows under specific conditions.
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A good accountant can help you create budgets, forecast revenue and plan for expansion. 

With accountants, you’ll feel more confident about your financial strategy.
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Knowing your finances are in order reduces your stress. 

This is especially important for business owners who want to focus on their craft, whether it’s brewing coffee or building websites.

The Costs of Hiring an Accountant

Hiring an accountant isn’t free and for small businesses operating on tight budgets, the cost can feel like a hurdle. 

Here’s a quick look at what you might expect to pay based on data from the Institute of Public Accountants (IPA) and industry averages in Australia:

• Basic Bookkeeping: Around $30 to $50 per hour for routine tasks, say reconciling accounts.
  
  
• Tax Returns: About $200 to $500 for a straightforward small business tax return.
  
  
• Full-Service Accounting: Approximately $1,000 to $5,000 annually for ongoing services (e.g., preparing Business Activity Statements (BAS), financial reporting, and giving advice.
  
  
• Specialised Services: Higher fees apply for complex tasks, such as business structuring or tax planning.

These costs vary depending on your business size, complexity, and location. 

For example, Sydney-based accountants may charge more due to higher demand and living costs.

When Is an Accountant Worth It?

Not every small business needs an accountant full-time, but certain scenarios make it a smart investment. 

Consider hiring an accountant if:

If your revenue is increasing or you’re hiring employees, an accountant can help manage payroll, superannuation and tax obligations.

If terms like goods and services tax (GST), BAS or pay-as-you-go (PAYG) leave you confused, an accountant can clarify and ensure you’re meeting ATO requirements.

If you’re spending hours on spreadsheets instead of serving customers, an accountant can streamline your processes so you can focus more on growing your business.

Setting up a business structure (e.g., sole trader, partnership or company) has tax and legal implications. An accountant can guide you to the best option.
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Lenders often require detailed financial reports. An accountant ensures your books are in order, increasing your chances of securing a loan.

Understanding Financial Risks & Getting the Right Insurance

There’s a clear link between sound financial management and protecting your business. 

An accountant can help you understand your financial risks, which is critical when choosing the right insurance. 

Think of these:

• Business Insurance: An accountant can provide accurate revenue and asset figures to ensure you’re not under- or over-insured.
  
  
• Workers’ Compensation: If you have employees, an accountant can calculate payroll accurately, which is essential for determining premiums.
  
  
• Liability Coverage: Understanding your financial exposure helps insurance brokers tailor Public Liability or Professional Indemnity Insurance to your needs.

Without a clear view of your finances, you might choose inadequate coverage, leaving your business vulnerable.

Alternatives to Hiring an Accountant

If the cost of an accountant feels out of reach, there are alternatives, though they come with trade-offs:

• Accounting Software: Tools like Xero or MYOB can simplify bookkeeping. 

Using accounting software can help you save time. However, software can’t replace expert advice.

• DIY Bookkeeping: You can manage your own books, but this risks errors so proceed with caution.
  
  
• Part-Time or Freelance Accountants: Hiring an accountant for specific tasks, say for BAS lodgments, can be cost-effective but may lack the ongoing support a full-time accountant provides.

How to Choose the Right Accountant

If you decide an accountant is worth it, here’s how to find the right one:

1. Check Qualifications: Look for a Certified Practising Accountant (CPA) or Chartered Accountant (CA) registered with CPA Australia or Chartered Accountants ANZ.
   
   
2. Industry Experience: Choose someone familiar with your industry, whether it’s retail, hospitality, or trades.
   
   
3. Local Knowledge: An accountant in your area will have a better understanding of your local regulations and market conditions.
   
   
4. Clear Communication: Pick someone who explains complex terms in plain English.
   
   
5. Transparent Fees: Ask for a clear breakdown of costs upfront to avoid surprises.

The Bottom Line

Is hiring an accountant worth it for your small business? 

For most, the answer is yes, especially if you value time, compliance and financial clarity. 

While the upfront cost might sting, the savings from avoided penalties, maximised deductions and better decision-making often outweigh it. 

In addition, solid financials make it easier to protect your business with the right insurance.

If you’re still on the fence, start small. Consult an accountant for a one-off task, such as your tax return, and see the difference it makes. 

Read our blog for other relevant and up-to-date info, tips and strategies. 

You can also visit our website or contact us for expert advice or assistance.