If you are a business owner or individual looking to present your finances in a professional format but do not need the depth of an audit you have probably come across the term compiled financial statements. They’re a cost-effective way to show your financial position, especially when required by banks, investors, or regulatory bodies.
In this guide, we will break down what affects the price, typical cost ranges, and how to get the most value from your CPA without breaking your budget.
What Are Compiled Financial Statements?
Compiled financial statement are financial reports prepared by a Certified Public Accountant (CPA) based on the financial data you provide. These statements typically include a balance sheet, an income statement, and sometimes a cash flow statement. Unlike audits or reviews, compilations do not involve verifying the numbers or providing assurance.
The CPA simply formats the data into a standard, presentable format, making it easier for third parties like banks or investors to understand your financial position.
Why Businesses and Individuals Request Them
People often request compiled financial statements when they need to present organized financials to third parties, but don’t require a full audit. For businesses, this might be to secure a loan, meet lender requirements, or attract investors.
For individuals, especially high-net-worth individuals, it could be to support immigration filings, divorce proceedings, or estate planning. It’s a cost-effective way to show credibility without going through an intensive audit process.
Typical Cost Range for Compiled Financial Statements
The cost of compiled financial statements can vary but generally falls between $500 to $2,500 depending on the complexity of your finances and who you hire. A small business with simple records might be on the lower end, while a company with multiple revenue streams or special reporting requirements will be on the higher side. It’s always best to request a custom quote from a CPA firm to get a more accurate idea of what you’ll pay.
Factors That Influence the Final Cost
Several key factors can affect the final cost of your compilation:
- Complexity of your financial records: More accounts and transactions = more work.
- Organization of your data: Clean books can reduce CPA hours (and your bill).
- Number of statements needed: Additional financial statements or footnotes may cost extra.
- Experience of the CPA: More seasoned firms may charge higher rates but often work faster and deliver more polished results.
- Urgency: Rush jobs typically come with a premium.
What’s Included in the Compilation Service
When you request a compiled financial statement, the CPA will take your raw financial data and organize it into formal financial statements like a balance sheet, income statement, and cash flow statement. They won’t verify the numbers or provide assurance but will ensure the presentation follows professional formatting and accounting standards, typically GAAP.
CPA vs. Non-CPA: Who You Hire Matters
Hiring a licensed CPA gives you more credibility, especially when your statements are being submitted to banks, lenders, or investors. A non-CPA might be cheaper, but they can’t issue official compilation reports that meet professional standards like those set by the AICPA.
In short, if accuracy and trust matter, go with a CPA.
Ways to Lower the Cost Without Sacrificing Quality
Want to save on your compiled financial statements cost? You can do so by keeping your bookkeeping organized, using cloud accounting software, and providing clear documentation upfront. Also, choose a CPA who specializes in your industry. They’ll work more efficiently and reduce unnecessary back-and-forth, helping you stay within budget.
Compilation Costs vs. Audit and Review Fees
Compared to an audit or a review, a compilation is the most affordable option. While an audit involves detailed testing and assurance and a review offers limited assurance compilations are based solely on the information you provide. That’s why compilation fees are typically much lower, making them ideal when no formal assurance is required.
