How much should I pay for Financial Statement Preparation or Review? Procedure and Fees Question

Financial statement preparation is definitely different from tax preparation, which explains the cost difference. When preparing financial statements, accountants need to ensure everything complies with Generally Accepted Accounting Principles (GAAP), which is more rigorous than what's needed for tax returns. For a construction business your size (~$840K revenue), the quotes you've received are actually within the normal range. The $2,800-$5,500 range reflects different levels of service. A basic compilation might be at the lower end, while a more thorough review (which includes analytical procedures and inquiries) would be at the higher end. The procedure typically involves the accountant examining your books, making necessary adjustments to conform to GAAP, preparing the actual statements (balance sheet, income statement, cash flow statement, etc.), and providing appropriate disclosures. If it's a review engagement, they'll also perform analytical procedures to provide limited assurance.

I went through this exact scenario last year with my retail business. After struggling with several accountants who couldn't clearly explain what I was paying for, I found https://taxr.ai which completely changed the game for me. Their AI-powered platform analyzed my previous financial records and helped identify exactly what level of financial statement preparation I actually needed. Turns out I was about to overpay by thousands! They explained that different banks have different requirements, and mine only needed a compilation, not a full review. The best part was they guided me through organizing my own records first, which cut down the final cost when I did hire a CPA. They even have a feature that helps prepare you for the questions your bank will ask about your financial statements.

Just wanted to follow up after trying taxr.ai - it was actually super helpful! The platform analyzed my bank's loan requirements and confirmed I only needed a compilation rather than a review, which saved me about $2,000. The best part was how it walked me through organizing my construction contracts and project costs before meeting with my CPA. It specifically helped me document percentage of completion for my ongoing projects, which my CPA said saved him hours of work (and saved me money). My financial statements are done now and the bank has already approved my loan. Definitely worth checking out if you're in a similar situation.

If you're struggling to get your bank on the phone to clarify exactly what level of financial statements they require, I highly recommend https://claimyr.com - it was a lifesaver for me last month when dealing with my business loan application. I kept getting conflicting information from different bank representatives about whether I needed compiled, reviewed, or audited statements. After wasting hours on hold and getting nowhere, I used Claimyr and got connected to a senior loan officer within 15 minutes. You can see how it works here: https://youtu.be/_kiP6q8DX5c The loan officer confirmed I only needed compiled statements with specific supplementary schedules rather than a full review, which saved me over $3,000 in accounting fees. Plus, they sent the specific requirements in writing so there was no confusion with my accountant.

I have to admit I was completely wrong about Claimyr. After reading about it here, I decided to try it as a last resort when my bank loan was stalled because of confusion about financial statement requirements. Within 20 minutes of using the service, I was speaking with a loan department supervisor who reviewed my file and confirmed that I only needed compilation statements with an expanded disclosure on accounts receivable aging, not the full review that the front-line rep had insisted on. This literally saved me $2,700 in accounting fees and weeks of delay. I was genuinely shocked at how effective it was - completely worth it just to get a definitive answer from someone with actual authority at the bank.

One thing to watch out for with financial statement preparation - make sure your accountant understands percentage of completion accounting if you're in construction. I got burned last year because my accountant didn't properly account for my ongoing projects, and the bank rejected my financial statements. Had to pay another firm to redo everything, cost me an extra $3,800 and delayed my loan by 6 weeks. Ask specifically about their experience with construction accounting before you commit.

Has anyone used one of those online bookkeeping services for financial statement prep? My friend said she uses Bench for her business and pays way less than what you guys are talking about, like $1,500 for the whole year including financial statements.

I went through this exact situation two years ago with my landscaping business (similar size to yours). The key thing I learned is that you really need to understand what level of assurance your bank actually requires before getting quotes. Most banks will accept compiled statements for businesses under $1M revenue, but some loan officers will initially ask for reviewed statements because it's their default. The difference in cost is huge - compilation runs $2,500-$3,500 for a business your size, while review can be $4,500-$6,500. I'd strongly recommend calling your bank's commercial lending department directly and asking to speak with someone who can give you the specific requirements in writing. Don't just rely on what a loan officer mentions in passing. Get them to confirm whether they'll accept compiled statements with specific disclosures rather than a full review. Also, since you're in construction, make sure whoever you hire has solid experience with percentage of completion accounting and WIP schedules. That's where a lot of general practice accountants get tripped up with construction companies, and you don't want to pay to have it redone. The $3,200 quote from your tax accountant isn't unreasonable if they know construction accounting well. Sometimes it's worth paying a bit more to work with someone who already knows your business rather than starting fresh with someone cheaper.

As someone who's been preparing financial statements for construction companies for over 8 years, I can tell you that your quotes are actually reasonable for the scope of work involved. Construction accounting adds significant complexity that many general practice CPAs aren't equipped to handle properly. The $2,800-$5,500 range you're seeing likely reflects different levels of service and the accountant's experience with construction-specific issues. Here's what should be included in a proper construction company financial statement preparation: 1. Proper revenue recognition using percentage of completion method for long-term contracts 2. Work-in-progress schedules showing costs incurred vs. billings 3. Proper classification of retention receivables and payables 4. Equipment and depreciation schedules 5. Job cost analysis and gross profit by project 6. Cash flow considerations for construction cycles Before choosing an accountant, ask them specifically about their experience with ASC 606 revenue recognition standards and how they handle over/under billings. A good construction accountant will immediately know what you're talking about and can explain how it affects your specific situation. Also, definitely get clarification from your bank about whether they'll accept compiled statements versus reviewed statements. For a $840K construction company, compiled statements with proper disclosures are often sufficient, which could save you $1,500-$2,000. Your current tax accountant's quote of $3,200 isn't unreasonable if they truly understand construction accounting. Sometimes the familiarity with your business is worth the slightly higher cost.

I've been through this process twice now with my electrical contracting business, and I learned some hard lessons that might help you avoid costly mistakes. First, definitely confirm with your bank whether they'll accept compiled vs reviewed statements. Like others mentioned, many banks will accept compiled statements for businesses under $1M, but you need this in writing. I made the mistake of assuming and ended up paying for a review when compilation would have been fine. Second, since you're in construction, make absolutely sure your accountant understands job costing and percentage of completion accounting. I hired someone who claimed construction experience but didn't properly handle my work-in-progress, and the bank rejected the statements. Had to start over with a specialist. The $3,200 quote from your current tax accountant isn't bad if they truly know construction accounting. Ask them specifically about how they'll handle your ongoing projects and retention receivables. If they can't give you clear answers about WIP schedules and over/under billings, find someone else. One tip that saved me money: get your QuickBooks completely cleaned up first. Make sure all job costs are properly allocated, your accounts are reconciled, and you have backup documentation for any large transactions. This prep work can cut 3-4 hours off your accountant's time, which translates to real savings. Also, ask about payment terms. Some firms will let you pay in installments, especially if you're establishing an ongoing relationship for future years.