How Much Does a Corporate Year-End Cost?

At the end of the year, regardless of how involved you are in the accounting aspect of your business, how much the accounting fees for your business’s year-end cost is something every business owner is aware of. Many business owners wade into the realm of accounting and tax advisors without having a guideline of prices for services, which often can result in paying higher fees than is necessary. Having been active in the accounting and tax world for many years and having had the opportunity to work closely with large international and national accounting firms all the way to smaller, local accounting offices, I can offer my insights into the industry.

The bulk of my time was spent working within a large international accounting and auditing firm. The advantage of this type of firm is the ability to provide a full range of service if your business would ever grow to a complex situation such as growing into multiple foreign tax jurisdictions and be subjected to special rules such as those imposed on financial institutions or banks. This, however, is not applicable to a local small to medium-sized business. The main complaint I heard from clients of a large firm is the high cost of using a large firm. The cost for a corporate year-end at a large firm ranges from $2,500 – $6,000. This is a prohibitive cost for many businesses and even when the business is experiencing a boom cycle, there is always a focus on minimizing costs which are unnecessarily inflated.

I can now contrast this to my experience with relatively smaller local firms. At a smaller firm, they are forced to bill a relatively smaller fee because the name of the firm does not have the inherent value that a large, recognizable firm name would have. This is similar to Coca-Cola being able to charge more for a can of cola than a regional brand such as Western Family or President’s Choice. The product is essentially the same, but the recognizable brand name demands a premium. Small firm billing rates for a corporate year-end range from $1,300 – $2,000. This range depends on the complexity of your business and the volume and nature of the transactions of your business. A good measure to determine the complexity of your business is to look at your last year’s accountant prepared financial statement package and see how many ‘adjusting journal entries’ were posted by the accountant. A basic corporate year-end would have about 3-7 adjustments, where the number of entries beyond this number indicates an increasingly complex year-end.

Interviewing different accountants to obtain an estimated cost for a year-end is very time-consuming and is not undertaken by many business owners when they set out to find an accountant. Hopefully, the above guiding on prices will provide enough information to give you a framework to set expectations of accounting fees for your business.

For more information on the year-end cost of proprietorship, visit How Much is a Proprietorship Year-End.