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Financial Statement Costs

mnewsomemnewsome subscriber Posts: 4
edited January 2008 in Startup Funding
All:
 
   I am in the enviable position of having more than sufficient cash for my startup.  My business counselor tells me that doing business with the local government requires that the financial statement must be completed by a CPA yet does not know the usual and customary fee.  I am in the nation`s capital.  Guidance sought from an informed party.
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    mnewsomemnewsome subscriber Posts: 4
    Much thanks for the timely reply.  l am told that a compilation is the only requirement.  This is an IT consultancy in Washington, DC where the primary client(s) will be government agencies the number of contracts awarded has yet to be determined as a certification is a requirement to contracting.  I am operating alone at present and will bring on independent contractors as the demands grow.  I could not imagine having more than three clients in the first year.  Please advise if more information is necessary
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    sagetroutsagetrout subscriber Posts: 1
    Compiled financial statements have the least stringent requirements and are therefore the least expensive to obtain.   The CPA doesn`t render an opinion on them but reviews them to see that they conform with generally accepted accounting principles (GAAP) and may do limited testing on them for things like reconciliations of the bank account.  
     
    What the fee will be depends on how much time the CPA firm has to expend to perform the compilation.   That`s a function of their hourly billing rate.   I would contact 2 or 3 local CPA firms to get an estimate for compiling your financial statements.   The cost will be reduced if you present them with clean financial records.   If your records are messy or sloppy or they contain questionable representations then it will add considerably to the bill.  
     
    Once you`ve decided on which firm to use you will be asked to sign an engagement letter which states their billing rate and may include an estimate of the total cost.    In deciding on a firm you may have other considerations.   Will you be using the firm to do your business tax return?   Are there other areas you might use them?  
     
    A consulting business is usually fairly straightforward in accounting terms and the cost of a compilation shouldn`t be substantial.   There is no such thing as a "customary fee" but hourly billing rates tend to be the same in an area for work like this.   In accounting work that requires specialized knowledge the rates can go up considerably.  
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    infinique1infinique1 subscriber Posts: 0 Member
    Get a MYOB to sort that out.
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