How Much Do Accounting Services Cost for a Small Business?

A $1-5M service business usually pays $2,000 to $6,000 a month for outsourced accounting. That covers a reviewed monthly close, controller oversight, and your tax returns spread across the year. Fractional CFO work is extra. Compare by layer, not price.

You are not buying "accounting." You are buying layers. The jobs good records do (tracking progress, producing financial statements, backing up your return) get done by different people, and each one bills separately.

What each layer costs

These are practitioner observations from the $1-5M service businesses I work with, not a rate card. Your market can move them.

Add the first three and you get roughly $1,700 to $6,000 a month, with tax spread at about $200 to $500 a month. Most land above $2,000 once payroll is in the picture. Two of those lines have their own deeper posts: what bookkeeping should cost and what a fractional CFO costs per month.

What does a typical $1-5M business actually spend?

Most of you need the first three layers, every month, without a gap. Not the fourth.

A $3M agency with clean books, payroll, and a handful of accounts tends to land around $2,500 to $3,500 a month for a reviewed close with controller review, plus a tax bill once a year. Clean books are cheap books. Smaller and simpler, a $1.5M consulting firm with one bank account and five people on payroll can sit near $2,000, because there is simply less to reconcile and less to review.

Bigger and messier is another story. A $4.5M contractor with job costing, retainage, three entities, and a line of credit can clear $6,000 before anyone mentions a CFO, and that price is fair for the work. So where do you sit? Count your bank and card accounts, your entities, your payroll, and your job-costed projects. More of those, higher price. Books that are months behind get a one-time cleanup bill on top, before the monthly fee starts.

Add a fractional CFO only when a real decision is on the table: a loan, a hire you can barely afford, a sale.

The mistake I see most? Paying CFO rates while the books underneath are still wrong, which means buying a forecast built on numbers nobody checked.

Fix the floor before you pay for the view.

If you are not sure which layer you are missing, the bookkeeper vs controller vs CFO breakdown sorts it in five minutes.

Is hiring someone in-house cheaper?

Rarely. And even when the price looks close, you get less coverage for the money.

Per the BLS, the median bookkeeper salary is $50,670. An accountant's median pay is $83,680. Then add the load. Across private industry, benefits make up 30% of what employers spend on a worker, so on average a salary is only about 70% of what the seat really costs you.

The rough math:

• In-house bookkeeper: about $72,000 a year loaded, or $6,000 a month.
• In-house accountant: about $120,000 a year loaded, or $10,000 a month.

The bookkeeper alone costs as much as the top of the full outsourced range, and it is one person. Nobody reviews their work. Nobody covers the vacation in close week. Hiring at controller level costs far more, since the BLS shows financial managers at a $166,570 median. For the longer version of this trade, read in-house vs outsourcing.

Where does tax prep fit in?

Separately, and almost always from a different person than the one keeping your books.

Your bookkeeper probably does not file your return, and that is normal. Why your bookkeeper doesn't do your taxes walks through the split. What matters for cost is who signs. By law, a paid preparer has to sign the return and include a PTIN, the IRS-issued preparer ID. And only CPAs, enrolled agents, and attorneys have unlimited rights to represent you before the IRS if a letter shows up. Cheaper preparers exist. Just know what you give up if the IRS writes back.

How do you compare two quotes?

Same list, both quotes:

• Is anyone reviewing the books, or only entering them?
• Is the month closed by a set date?
• Is the tax return in the fee or billed separately?
• Who answers when you call with a question?

Two quotes that look $1,500 apart often turn out to be the same price for different work. Watch hourly billing too. In the books I see, it looks cheaper on the proposal and then charges you more in exactly the months your books are messiest, which is when you can least afford a surprise. Fixed monthly fees with a written scope put that risk on the firm instead of on you.

The honest answer

You are not buying a CFO first. You are buying a close you can trust, and at $1-5M that is most of the $2,000 to $6,000.

Cheap books are the expensive line. That bill comes later, in a cleanup, in a tax notice, or in a decision made on the wrong number.