Accountant or accounting software: The true cost

In a nutshell: Software is cheaper to buy, but the true cost is measured in time spent and the risk of errors. For a simple case, software may be sufficient; as soon as things get more complex, hiring an accountant often pays for itself through the taxes saved and errors avoided.

“Why pay an accountant when accounting software costs just a few dollars a month?” That’s a good question, and the honest answer depends on your situation. Let’s take a closer look at the comparison, beyond just the subscription price.

How much does accounting software cost?

Accounting software generally costs anywhere from a few dozen to a hundred dollars a month. On paper, that doesn’t seem like much. But the software doesn’t do the work for you, it simply provides you with a tool. The real cost lies in everything else that goes along with it.

• The time the time you spend entering, categorizing, reconciling, and filing your tax returns.
• The learning curve : taxes, expense categories, year-end.
• The Risk of error : An incorrect GST/QST return, a missed deduction, and the bill goes up.

The time you spend on your numbers is time you’re not spending on your business.

How much does an accountant cost, and what value do they bring?

An accountant for an SME in Quebec costs a median of about $3,000 per year, ranging from $500 to $6,000 depending on the industry (see The Bankeo Fee Barometer). On the other hand, it saves you:

• du time, which it brings to your business;
• of taxes, through deductions and tax optimizations you may not be aware of;
• from the peace of mind, because your tax returns are filed correctly and on time.

For many business owners, these savings outweigh the fees. Therefore, an accountant shouldn’t be compared to the price of software, but rather to the net return they provide.

The right choice for your situation

There’s no single answer. Here are a few points to consider:

• Very straightforward accounting, few transactions, comfortable with numbers : Software may be enough, at least at first.
• Increasing volume, incorporation, multiple sources of income, taxes : An accountant pays for themselves quickly.
• Common Solution : software for day-to-day tasks, plus an accountant for year-end closing, taxes, and advice. The best of both worlds.

The key is not to confuse “cheaper to buy” with “cheaper overall.”

How to make the right choice

If you’re unsure, the easiest thing to do is talk to a professional who can assess your actual situation. Bankeo will connect you, for free, with a vetted accountant suited to your industry and budget, who has already been vetted for the essentials (see The Bankeo Trust Index). You can then make an informed decision and agree on the price directly with them.

Not sure if you need an accountant? Talk to Bankeo about it for free.

In summary

• Software is cheaper to buy; its true cost is measured in terms of time and the risk of errors.
• An accountant should be evaluated based on what they deliver (time and taxes saved), not on the price of a subscription.
• Simple case: software may be enough. As soon as things get more complex: hiring an accountant pays off. Price guidelines: The Bankeo Fee Barometer.