It is very common for people to feel as though their accounting fees are expensive. Often it is the single biggest administrative bill a sole trader or small business can receive each year, so it’s easy to understand why people ask questions and want to know why this cost is so high.
Unfortunately there is no magic way to prepare a set of accounts or complete a tax return. Checking, processing and asking questions are all time consuming and this will be reflected in your accountant’s bill since they need to get paid for the time they have spent. If you do feel your accountant has spent longer than you thought necessary, start by asking them where the time was spent and whether there is anything you can do to reduce the time, like changing your record keeping.
If an accountant receives all the accounting information in a perfect format, regulatory bodies require accountants to undertake independent checks of information they present to HMRC or Companies House. No shortcuts allowed!
Large firms with offices and extra admin staff need to earn more to pay their bills. If you are dealing with firms that have multiple locations or large offices charges will almost certainly be higher than a sole trader who works from home. But don’t forget the large firm with multiple offices will have a huge amount of experience and talent which needs to be taken into account when you receive their bill.
Some people are just more experienced than others but sharing this experience comes at a price. For example if you have a specialised property business you may want a highly experienced property accountant who can help save you tax. Whilst fees may be high it will be outweighed by the amount of tax he or she saves you by setting you up with relevant tax schemes and a specialised business structures.
Non income generating cost
Anyone who runs a business knows it is important to keep your overheads to a minimum and accountants fees can stick out as a major cost that doesn’t generate any revenue in return. It’s so important to remember that whilst it may not feel that you are recieving anything tangible in return, if you didn’t have a good accountant on your side penalties and charges may soon start mounting up.
Value for Money
If your accountant has ignored you or you do not trust the advice you are given then understandably you will not be happy when the bill arrives. As with paying for anything, if you feel it represents good value, you are happy to pay for it.
Unfortunately there are good accountants and bad accountants. The good ones may come with a price tag but getting the right advice will save you tax, time and penalties so will be cost neutral even though you may not receive anything tangible in return for your payment.