Published: November 2024
When hiring an accountant for your Australian business, the instinctive first question is usually "how much does this cost?" But the better question is "what will this actually save me, and what value will I receive?"
Accounting fees for Australian small to medium businesses typically range from $2,000 to $15,000 annually depending on revenue, business structure, and service scope. A sole trader with $150,000 revenue might pay $1,500 to $2,500 annually, while a company with $3 million revenue typically pays $8,000 to $12,000 for comprehensive tax and compliance services.
However, choosing an accountant based purely on price is one of the costliest mistakes business owners make. An accountant charging $2,000 who misses $8,000 in tax deductions delivers far worse value than an accountant charging $5,000 who identifies $15,000 in legitimate tax savings.
This article explains what Australian SME accounting actually costs, what drives those costs, the hidden expenses of cheap accounting, and how to evaluate real value beyond hourly rates.
Several factors influence how much you will pay for professional accounting services.
Accounting complexity generally correlates with revenue. Larger businesses have more transactions to process, review, and report. They often have employees requiring payroll management and superannuation compliance. They maintain more complex supplier and customer relationships.
Revenue-based pricing guides:
Under $200,000 annual revenue (sole trader or small company): $1,500 to $3,500 annually
$200,000 to $500,000 revenue: $3,000 to $6,000 annually
$500,000 to $1 million revenue: $5,000 to $10,000 annually
$1 million to $3 million revenue: $8,000 to $15,000 annually
$3 million to $10 million revenue: $15,000 to $35,000 annually
These are general guides. Actual fees depend on structure complexity, transaction volume, and specific service requirements.
The legal structure you operate under significantly impacts accounting costs and complexity.
- Sole trader: Simplest structure, lowest accounting costs. You report business income on your personal tax return. No separate company tax return or financial statements required. Typical annual fees: $1,500 to $3,500 for tax preparation and basic advice.
- Partnership: Slightly more complex than sole traders. Partnerships lodge partnership tax returns, then partners include their share of partnership income in personal returns. Typical annual fees: $2,500 to $5,000 depending on partner numbers and complexity.
- Company (Pty Ltd): Companies require full financial statements prepared to accounting standards, company tax returns separate from personal returns, ASIC annual statements and compliance, and director personal tax returns. Typical annual fees: $4,000 to $12,000 depending on revenue and complexity.
- Trust: Trusts add complexity through trust tax returns and distribution minutes, beneficiary tax considerations, trustee compliance for corporate trustees, and often coordination with related entities. Typical annual fees: $3,500 to $8,000 depending on beneficiary numbers and distribution complexity.
- Multiple entities: Many Australian businesses operate through multiple connected structures (for example, trading company plus family trust plus property trust). Each entity typically requires separate accounting, though accountants often provide package pricing. Typical fees: $8,000 to $25,000 for multi-entity structures depending on number and complexity.
Example: A Melbourne café operating as a sole trader with $280,000 revenue pays approximately $2,200 annually for tax preparation, quarterly BAS lodgement, and basic advice. When they incorporate as a company the following year, their accounting fees increase to $5,500 annually due to additional company compliance requirements including financial statements, company tax return, ASIC lodgements, and director personal returns.
Beyond revenue, the number and complexity of transactions drives accounting costs.
1. High transaction volume businesses: Retail businesses processing thousands of small customer transactions require more detailed reconciliation and review than service businesses with 50 clients and 50 invoices annually.
2. Complex transaction types: Businesses with foreign currency transactions, intercompany dealings between related entities, stock or inventory management, complex GST scenarios like mixed supplies or margin schemes, or grant income with acquittal requirements face higher accounting costs due to complexity.
3. Quality of your record-keeping: Well-maintained accounting records using proper software with correctly categorised transactions reduce your accountant's time requirements substantially. Poor record-keeping (shoe boxes of receipts, no accounting software, bank statements with unclear descriptions) significantly increases accounting costs.
A Sydney consultant with $600,000 revenue and 80 clients using Xero properly might pay $5,000 annually for accounting. A retailer with the same $600,000 revenue but poor record-keeping and 15,000 mixed cash and card transactions might pay $9,000 to $12,000 for the same service level because the accountant spends far more time reconstructing and verifying records.
Accounting costs vary dramatically based on what services you need.
Compliance only: Tax return preparation, BAS lodgement, financial statement preparation, and ASIC lodgement represent baseline compliance. This keeps you legal but provides minimal strategic value. Fees: Lower end of ranges mentioned above.
Compliance plus advisory: Adds tax planning and structure advice, business performance review and benchmarking, profit improvement recommendations, and regular strategic discussions. Fees: Middle to upper end of ranges, typically 30% to 50% more than compliance-only.
Full CFO advisory: Includes all compliance, plus monthly management reporting, cash flow forecasting and management, growth strategy and scenario planning, funding and investment advice, and regular strategic partnership. Fees: Premium pricing, often $15,000 to $50,000+ annually depending on business size.
Most Australian SMEs benefit from the middle tier: compliance plus advisory. Pure compliance is false economy for growing businesses.
Sole traders represent the simplest business structure with correspondingly lower accounting costs.
What is typically included:
Typical annual fees:
Revenue under $100,000: $1,500 to $2,500
Revenue $100,000 to $300,000: $2,000 to $4,000
Revenue over $300,000: $3,500 to $6,000
Example: A Brisbane graphic designer operating as a sole trader with $180,000 revenue pays $2,800 annually for quarterly BAS lodgement ($350 per quarter) and annual tax return preparation including business income reconciliation ($1,400). The accountant reviews her deductions, confirms she is claiming all legitimate expenses, and provides basic tax planning advice around equipment purchases and timing.
Companies face substantially higher accounting costs due to increased compliance obligations.
What is typically included:
Typical annual fees by revenue:
Revenue under $500,000: $4,000 to $6,000
Revenue $500,000 to $1 million: $5,000 to $8,000
Revenue $1 million to $3 million: $8,000 to $12,000
Revenue $3 million to $10 million: $12,000 to $20,000
These fees typically exclude director personal tax returns, which add $800 to $1,500 per director depending on complexity.
Example: A Perth manufacturing company with $2.4 million revenue pays $10,500 annually broken down as follows: monthly BAS preparation and lodgement ($250 per month = $3,000), company financial statements and tax return ($5,500), ASIC compliance ($500), two director personal tax returns ($750 each = $1,500), plus quarterly advisory meetings included. Total: $10,500.
Family trusts and unit trusts add complexity through distribution requirements and beneficiary coordination.
What is typically included:
Typical annual fees:
Simple family trust, few beneficiaries: $3,000 to $5,000
Family trust with multiple beneficiaries: $4,500 to $7,000
Trust plus corporate trustee structure: Add $2,000 to $3,000
Unit trust or complex discretionary trust: $5,000 to $10,000
Example: A Canberra family with a discretionary trust holding investment properties ($450,000 annual rent) pays $6,200 annually including trust financial statements and tax return ($4,500), distribution minutes and beneficiary tax advice for four family beneficiaries ($1,200), and quarterly BAS lodgement ($500). The accountant advises on optimal income distribution to minimise overall family tax.
Many Australian businesses operate through several connected entities for asset protection, tax optimisation, or operational reasons.
Common structures:
Typical annual fees:
Two entity structure (company plus trust): $7,000 to $12,000
Three entity structure: $10,000 to $18,000
Four or more entities: $15,000 to $30,000+
Accountants often provide package pricing for related entities rather than charging full individual fees for each entity.
Example: A Sydney family business operates through a trading company ($1.8 million revenue), a family trust holding shares in the company, and a property trust holding their business premises. Annual accounting costs: trading company accounts and tax return ($6,500), family trust accounts, return, and distributions ($4,000), property trust accounts and return ($3,200), ASIC compliance for company ($500), coordination and intercompany advice ($2,000). Total package: $16,200, representing a discount from individual entity pricing.
Understanding what you actually receive for accounting fees helps evaluate value.
At minimum, competent accountants should provide:
Accurate tax return preparation: All income correctly reported, all legitimate deductions claimed, calculations verified and double-checked, and lodgement within required timeframes.
BAS preparation and lodgement: Quarterly or monthly activity statements, accurate GST calculations, PAYG withholding correctly reported, and timely lodgement to avoid penalties.
Financial statement preparation: For companies and trusts, properly prepared accounts to accounting standards, balance sheet reconciliation, and profit and loss accuracy.
Basic compliance advice: Confirmation of structure appropriateness, notification of relevant tax law changes, and response to ATO correspondence.
If your accountant is not providing these minimum services accurately and on time, you have the wrong accountant regardless of price.
Beyond compliance, quality accountants provide strategic value:
Tax planning: Year-end tax position forecasting, timing strategies for income and deductions, structure reviews and optimisation advice, and specific transaction tax advice (for example, asset purchases, property sales).
Business performance analysis: Profit margin analysis and benchmarking against industry, expense review identifying cost reduction opportunities, and revenue trend analysis and growth strategies.
Cash flow management: Cash flow forecasting and planning, working capital optimisation advice, and debtor and creditor management strategies.
Regular communication: Quarterly or semi-annual review meetings, proactive contact about tax opportunities or issues, and responsive communication when you have questions.
These advisory services represent the difference between an accountant who simply processes tax returns and one who actively improves your business financial position.
Example: A Melbourne wholesaler pays $8,500 annually for accounting. During a quarterly review, the accountant identifies that the business consistently maintains $180,000 in stock but only needs $120,000 for normal operations. They recommend reducing stock levels and negotiating better payment terms with suppliers. Implementing this advice frees up $60,000 cash the business uses to negotiate early payment discounts with suppliers, saving $6,500 annually. The accountant's fees pay for themselves through one strategic recommendation.
Many Australian business owners choose accountants based primarily on price, selecting the cheapest option. This decision frequently costs far more than the saved fees.
To offer very low fees (for example, $1,000 for company accounting that typically costs $5,000), accountants must either spend minimal time on your work (rushing through preparation with limited review), or employ junior, inexperienced, or unqualified staff. Sometimes both.
Time compression: An experienced accountant might spend 15 hours on a company tax return including thorough review, reconciliation, and tax planning analysis. A cheap accountant spends 4 hours producing basic compliance with no strategic review. The difference shows in missed deductions, errors, and lost opportunities.
Junior staff: Budget accounting firms often use entry-level staff or overseas preparation teams with limited review by qualified accountants. Technical errors, missed opportunities, and poor advice are common.
Missed tax deductions: An accountant rushing through your return may miss legitimate deductions. Missing $15,000 in deductions costs you $3,900 to $4,500 in additional tax (at 26% to 30% business tax rates). The savings from a $1,500 cheaper accountant evaporates.
Incorrect lodgements: Errors in tax returns or BAS require amendments, often triggering ATO reviews and audits. Amending returns costs additional accounting fees plus your time dealing with ATO enquiries. Serious errors can result in penalties.
No strategic advice: Cheap accountants provide compliance only. You miss opportunities for structure optimisation, tax planning, profit improvement, and growth strategies. These missed opportunities cost multiples of accounting fees.
Redo costs: When businesses finally switch to quality accountants after using cheap services, they often discover errors requiring amended returns, incorrect accounting structures requiring reorganisation, and missed compliance obligations requiring rectification. Fixing these problems often costs more than proper accounting would have cost initially.
Example: A Sydney café used a discount accountant charging $1,800 annually for several years, saving approximately $2,500 compared to proper accounting quotes. When they switched accountants in 2024, the new accountant identified the previous accountant had failed to claim $47,000 in legitimate deductions over three years (approximately $15,000 annually), incorrectly calculated GST resulting in overpayment of $8,200, and set up their business structure inefficiently costing approximately $6,000 annually in unnecessary tax. Total cost of cheap accounting: over $30,000 in three years, far exceeding the $7,500 saved in fees.
Move beyond hourly rates to assess real value.
What is your experience with businesses like mine? Accountants specialising in your industry or business size provide better advice. An accountant who primarily serves tradies may not understand professional services businesses well, and vice versa.
What qualifications do you and your staff hold? Look for Chartered Accountants (CA) or CPA Australia members. Registered tax agents must hold these qualifications. Ask who will actually work on your accounting (the partner you meet with, or junior staff?).
What is included in your fees? Clarify exactly what services are included: how many BAS lodgements, personal tax returns for directors or partners, advisory meetings or phone calls, and response to ATO correspondence.
How do you add value beyond compliance? Ask for specific examples of tax savings, business improvements, or strategic advice they have provided to similar clients.
What is your communication approach? Do they contact you proactively with tax planning opportunities, or only respond when you call? Do they provide quarterly reviews or just annual tax season contact?
Can you provide client references? Speaking with current clients provides insights into service quality, responsiveness, and actual value delivered.
Fees dramatically below market rates: If everyone quotes $5,000 to $8,000 but one accountant quotes $2,000, there is a reason. You will receive inferior service, rushed work, or hidden additional charges.
Lack of relevant qualifications: Unqualified or unregistered accountants cannot legally prepare tax returns or provide tax advice. Ensure your accountant is a registered tax agent.
No clear scope of services: Vague proposals like "accounting services" without specific deliverables allow accountants to later charge extra for services you expected were included.
Reactive, not proactive: If the accountant only contacts you when you call them, or only engages during tax season, you are receiving compliance-only services with no strategic value.
They don't understand your business: In initial meetings, quality accountants ask detailed questions about your business, goals, challenges, and industry. Accountants who do not show interest in understanding your specific situation cannot provide valuable advice.
Your business is very simple with minimal transactions, you have strong financial management skills yourself and just need lodgement services, your business is mature and stable with no growth plans or complexity, or cost constraints genuinely prevent better options. Even then, recognise you are receiving minimal value beyond regulatory compliance.
You are growing your business and need strategic financial input, you want to optimise tax position and minimise liability legally, you value having an experienced sounding board for business decisions, or your business has moderate complexity requiring professional navigation. This is the sweet spot for most Australian SMEs with $500,000 to $10 million revenue.
Your business is scaling rapidly requiring sophisticated financial management, you are making major decisions like acquisitions, significant investment, or expansion, you need regular detailed financial reporting and forecasting, or you lack internal financial expertise and need embedded CFO-level support. This typically suits businesses with $5 million plus revenue or high-growth ventures.
Reframe accounting from a cost to an investment. Quality accounting should generate returns through tax savings, profit improvement, and better decision-making that exceed the fees paid.
Example return on investment analysis:
A business pays $10,000 annually for comprehensive accounting and advisory services. Over the year, their accountant:
Total value: $41,880 in first year against $10,000 investment, representing 318% return. Even taking just the direct tax savings ($16,680), the return is 67% in year one.
Compare this to saving $4,000 by choosing a discount accountant who provides compliance only with no strategic advice. You pay $6,000 but receive zero strategic value. Which is actually cheaper?
Company director personal tax returns are often quoted separately from company accounting. When comparing quotes, clarify whether director/partner personal returns are included or additional.
Sole traders do not face this because business income appears on their personal return. Companies and partnerships require both business entity returns and individual owner returns.
Some accountants include quarterly advisory meetings in annual fees. Others charge separately for meetings and phone consultations beyond basic compliance. Clarify meeting inclusion and any hourly charges for additional advice.
If your accountant requires you to use specific accounting software (like Xero, MYOB, or QuickBooks), those subscription costs add $30 to $100 monthly on top of accounting fees. Some accountants include software in packages, others charge it separately.
Responding to ATO queries, managing reviews or audits, and amending previous returns may incur additional fees beyond annual compliance pricing. Clarify whether basic ATO correspondence response is included or charged hourly.
How much should I pay for annual tax return preparation as a sole trader?
Sole traders typically pay $1,500 to $4,000 annually depending on revenue and complexity. This should include your personal tax return with business income, quarterly BAS lodgement if GST-registered, and basic tax planning advice. Very simple sole traders with minimal income might pay less, while those with complex deductions or multiple income sources pay more.
Why do accountants charge more for company structures than sole traders?
Companies require significantly more work including full financial statements prepared to accounting standards, separate company tax returns, ASIC annual compliance and lodgement, director personal tax returns in addition to company returns, and more complex tax planning around dividend strategies. This additional complexity justifies higher fees.
Should I choose an accountant based on the lowest quote?
No. Choosing purely on price usually costs more through missed tax savings, errors requiring amendments, lack of strategic advice, and often poor service quality. Focus on value delivered versus fees charged. An accountant saving you $12,000 annually in tax and charging $7,000 provides better value than one charging $3,000 but saving nothing.
What is the difference between a registered tax agent and a bookkeeper?
Registered tax agents hold qualifications (CA or CPA) and registration allowing them to prepare and lodge tax returns and provide tax advice. Bookkeepers can maintain your accounting records and prepare BAS (if BAS agent registered) but cannot provide tax advice or lodge tax returns unless also registered as tax agents. Many accountants provide both bookkeeping and tax agent services.
How often should I meet with my accountant?
For strategic advisory value, quarterly meetings suit most businesses. This allows regular performance review, proactive tax planning throughout the year, and timely course corrections. Minimum is annual meeting for tax return preparation, though this provides limited strategic value. Monthly meetings suit businesses with complex needs or rapid growth.
Can I deduct accounting fees as a business expense?
Yes. Accounting fees for business tax returns, BAS preparation, business advice, and related services are fully tax deductible business expenses. Fees for personal tax matters (non-business personal tax return components) are generally not deductible. Your accountant can advise on specific apportionment where fees cover both business and personal matters.
What should I expect from a good accountant beyond tax return preparation?
Quality accountants provide proactive tax planning recommendations, business performance analysis and benchmarking, advice on improving profit margins and cash flow, structure advice optimising tax position, and responsive communication throughout the year. They act as strategic business advisors, not just compliance processors.
How do I know if I'm paying too much for accounting?
Compare fees to industry benchmarks for your revenue level and structure, evaluate value received (tax savings, strategic advice) versus fees paid, assess responsiveness and service quality, and get competitive quotes from other qualified accountants. If you are paying top-of-market fees but receiving only basic compliance with no strategic value, you are paying too much regardless of absolute amount.
Should I use a large accounting firm or small local practice?
This depends on your needs. Large firms offer specialised expertise, multiple service lines, and sophisticated technical capabilities but often charge premium fees and may assign junior staff to small clients. Small local practices often provide more personalised service, partner-level attention, and competitive pricing but may lack deep specialisation. Choose based on your specific complexity, preference for relationship versus technical depth, and budget.
What happens if my accountant makes a mistake on my tax return?
Registered tax agents carry professional indemnity insurance covering errors. If mistakes result in additional tax, penalties, or interest, the accountant should correct the error at no charge and potentially compensate for consequential costs depending on circumstances. This is another reason to use properly qualified, insured, registered tax agents rather than unqualified discount services.
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