Are Accounting Consulting Firms The Best Option For Small Businesses?
Consulting firms are in a word…expensive. Yes, you can get talent without having to hire an employee or worry about the quality of the work, but you pay for it. If the accountants are employees to the firm, this is a less expensive model for you as the client, but you are now having your books managed by someone who has an employee mindset, probably not getting paid what their worth, and waiting for the opportunity to go consult on their own. Expect turnover.
The other non-employee consulting company model has a typical mark-up of 50-70% if they work with independents. This is reasonable if you consider the amount of HR/people administration, legal & insurance risk, and client management that is involved in running an accounting consulting firm (think Enron.) The better the talent, expect to pay double.
If you hire a CPA firm, in most cases (not all), the person who actually performs the work is in fact a bookkeeper whose work is reviewed by the CPA. You think you are paying for a CPA, but the work is being done be a bookkeeper.
In our business model, the CPA does the work, not a bookkeeper. How can you tell? Ask.
If the consulting or tax firm bookkeeping rate is inexpensive, the primary reason for this is usually because the person you are working with isn’t performing the work. This is very common in CPA firms. The CPA doesn’t do the work, they just review the work a bookkeeper they have on staff completed. A CPA typically charges $100-$300/hr, so if you aren’t sure…ask.
This model is fine because the bookkeeper’s work is being reviewed by a professional. However, it simply isn’t what most people think they are paying for.