Reviewing accountants costs - fairly!
Discussion
Been with current accountants 10 years. Nice guys, but am reviewing this and many other costs due to the increased outgoings left right and centre these days.
Obviously theirs is a business with 5 day a week staff costs and 365 days a year overheads but, especially with the advent (and extra cost to me) of Xero (avoiding them a bag of messy receipts
), and since I do all my own VAT via Xero, would they spend more than a few hours on my accounts annually? There is contact once a year to review the return but no hints and tips update e-mails etc. They then charge me an extra £80 for Companies House return and £180 for a P11D (which rankles a bit as its just 1 car). plus the tax investigation insurance they offer is very poor value IMHO given the cover and risk.
It is not really fair for me to base the cost and value on a time only basis, like I'd reference in my industry, so really want to be fair and balanced here
What would be a fair going (regional) rate to do the basics of returns for a micro Ltd + 2 directors personal returns + the nominal 2 x PAYE bit?
Obviously theirs is a business with 5 day a week staff costs and 365 days a year overheads but, especially with the advent (and extra cost to me) of Xero (avoiding them a bag of messy receipts
), and since I do all my own VAT via Xero, would they spend more than a few hours on my accounts annually? There is contact once a year to review the return but no hints and tips update e-mails etc. They then charge me an extra £80 for Companies House return and £180 for a P11D (which rankles a bit as its just 1 car). plus the tax investigation insurance they offer is very poor value IMHO given the cover and risk.It is not really fair for me to base the cost and value on a time only basis, like I'd reference in my industry, so really want to be fair and balanced here
What would be a fair going (regional) rate to do the basics of returns for a micro Ltd + 2 directors personal returns + the nominal 2 x PAYE bit?Do they prepare a full set of accounts with a profit and loss account AND a balance sheet?
Is your business a limited company, a sole trader or partnership?
What quality of balances does your Xero accounts provide to the accountant, i.e are the balance sheet items such as bank balances, trade debtors, trade creditors, amounts owed for various taxes (VAT, PAYE etc) fully reconciled and correct?
Is the analysis work and posting of items of for the income and expenditure/profit and loss account reliable i.e. how much correction might the accountant have to do to ensure that items are treated correctly in the accounts?
Do you have any complicated aspects to the accounts, such as having to account for leasing or hire purchase agreements. If you do, are the related postings handled correctly by yourself or does the accountant have to "fix" the postings. In my experience, people doing their own postings regarding such finance agreements always make a right pig's ear of it and the whole thing invariably has to be redone by the accountant.
Is your business a limited company, a sole trader or partnership?
What quality of balances does your Xero accounts provide to the accountant, i.e are the balance sheet items such as bank balances, trade debtors, trade creditors, amounts owed for various taxes (VAT, PAYE etc) fully reconciled and correct?
Is the analysis work and posting of items of for the income and expenditure/profit and loss account reliable i.e. how much correction might the accountant have to do to ensure that items are treated correctly in the accounts?
Do you have any complicated aspects to the accounts, such as having to account for leasing or hire purchase agreements. If you do, are the related postings handled correctly by yourself or does the accountant have to "fix" the postings. In my experience, people doing their own postings regarding such finance agreements always make a right pig's ear of it and the whole thing invariably has to be redone by the accountant.
Eric I know your standards and helpful nature here - but this is just a query about market cost or value not ability I think. We take ability as a given in employing any chartered professional.
I do pay considerably more than you Jordie B - but I certainly haven't concluded I'm being overcharged.
I do pay considerably more than you Jordie B - but I certainly haven't concluded I'm being overcharged.
Ken Figenus said:
Eric I know your standards and helpful nature here - but this is just a query about market cost or value not ability I think. We take ability as a given in employing any chartered professional.
I do pay considerably more than you Jordie B - but I certainly haven't concluded I'm being overcharged.
An accountant can only quote based on assessing what additional work they need to do at their end.I do pay considerably more than you Jordie B - but I certainly haven't concluded I'm being overcharged.
If you present an accurate and fully compliant set of statutory accounts with all associated tax computations fully accounted for or alternatively hand over a shonkilly put together set of Xero figures which require a large amount of corrections to turn into something presentable, then their fees will be very different depending on which scenario applies.
My accountant extracts all the company info they require from Xero as they have full access to this expensive Excel! It does make VAT a breeze mind!
Its all reconciled properly by me and I basically do not even do any petty cash any more so everything they need is all there in Xero. I of course expect the accountant to then process it and do the rest - they request bank statements too which I send as CSV. Seems straightforward?
Its all reconciled properly by me and I basically do not even do any petty cash any more so everything they need is all there in Xero. I of course expect the accountant to then process it and do the rest - they request bank statements too which I send as CSV. Seems straightforward?
Eric Mc said:
What quality of balances does your Xero accounts provide to the accountant, i.e are the balance sheet items such as bank balances, trade debtors, trade creditors, amounts owed for various taxes (VAT, PAYE etc) fully reconciled and correct?
Is the analysis work and posting of items of for the income and expenditure/profit and loss account reliable i.e. how much correction might the accountant have to do to ensure that items are treated correctly in the accounts?
This x1000Is the analysis work and posting of items of for the income and expenditure/profit and loss account reliable i.e. how much correction might the accountant have to do to ensure that items are treated correctly in the accounts?
My sister in law asked me to have a look at her books as her accountant was "charging the earth". The SiL posted everything onto Sage, "it must only be a couple of hours work for them" etc.
She thought she was doing a great job but wasn't a bookkeeper - nothing reconciled as she had no understanding at all.
I spent about a week fixing everything on Sage for the next year end, the accountant's bill dropped by 80% for that year.
You've basically described the same service we have here - limited company that only employs me and Mrs T - and our Accountant dropped us a line at the end of our financial year to say he was proposing an increase to our fee.
He reckons he'd charge a new client £1,750 + VAT, though he's charging us less.
Seems like a bargain when I consider the headaches he and his colleagues take off us, the knowledge they bring to the table and the opportunity cost if I had to take time out to do it all myself.
Saw a tweet earlier from a lady saying she was taking a day off even though she should be doing her tax return. That'll be the tax return my Accountant sent me to sign last May . . .
He reckons he'd charge a new client £1,750 + VAT, though he's charging us less.
Seems like a bargain when I consider the headaches he and his colleagues take off us, the knowledge they bring to the table and the opportunity cost if I had to take time out to do it all myself.
Saw a tweet earlier from a lady saying she was taking a day off even though she should be doing her tax return. That'll be the tax return my Accountant sent me to sign last May . . .
MOBB said:
This x1000
My sister in law asked me to have a look at her books as her accountant was "charging the earth". The SiL posted everything onto Sage, "it must only be a couple of hours work for them" etc.
She thought she was doing a great job but wasn't a bookkeeper - nothing reconciled as she had no understanding at all.
I spent about a week fixing everything on Sage for the next year end, the accountant's bill dropped by 80% for that year.
Ah yes, I'd forgotten about all that back and forth as we haven't got into Y/E '23 yet. Though I'm sure we'll be chased once this month is over.My sister in law asked me to have a look at her books as her accountant was "charging the earth". The SiL posted everything onto Sage, "it must only be a couple of hours work for them" etc.
She thought she was doing a great job but wasn't a bookkeeper - nothing reconciled as she had no understanding at all.
I spent about a week fixing everything on Sage for the next year end, the accountant's bill dropped by 80% for that year.
Our Accountant told us which category we should put office milk under last year as it turned out between me and Mrs T we'd managed to allocate it to 3 different categories over the course of the year!
Ken Figenus said:
My accountant extracts all the company info they require from Xero as they have full access to this expensive Excel! It does make VAT a breeze mind!
Its all reconciled properly by me and I basically do not even do any petty cash any more so everything they need is all there in Xero. I of course expect the accountant to then process it and do the rest - they request bank statements too which I send as CSV. Seems straightforward?
I wasn't really asking you specifically about your own records. I was just trying to point out that the amount of work required to be done by an accountant is very much dependent on the quality of the data provided to the accountant.Its all reconciled properly by me and I basically do not even do any petty cash any more so everything they need is all there in Xero. I of course expect the accountant to then process it and do the rest - they request bank statements too which I send as CSV. Seems straightforward?
Just because somebody posts their day to day work onto some commercial accounting software does not necessarily mean that the work required to be done by the accountant is going to be reduced. In fact, it often makes life much more complicated for the accountant.
PistonBroker said:
Ah yes, I'd forgotten about all that back and forth as we haven't got into Y/E '23 yet. Though I'm sure we'll be chased once this month is over.
Our Accountant told us which category we should put office milk under last year as it turned out between me and Mrs T we'd managed to allocate it to 3 different categories over the course of the year!
Golden rule of accountancy/bookkeeping - if you can't be right, at least be consistent.Our Accountant told us which category we should put office milk under last year as it turned out between me and Mrs T we'd managed to allocate it to 3 different categories over the course of the year!
Companies house charge for the return, so part of the cost will be that. There are other factors too. In order to complete your return your statutory books must be kept up to date. Who maintains those, is it you or the accountant. Then there's the time taken to complete and submit the return itself. Overall, £80 sounds like fair value if your not doing any of the above.
P11d, you can do this yourself if you feel the cost is too high. You will need the online login to start. Details of the car, whether there is private fuel involved, and from there you find the relevant list price (or take it from the previous p11d), Co2 figure, first registered date, engine size etc. You then find the relevant tax rates/class 1a NIC percentages and work out the benefit, complete and submit the return. Keep a copy yourself for your own tax return. Again, £180 probably isn't unrealistic, but you may get it £50 or so cheaper if you shop around.
Fee protection insurance - this is completely voluntary and you don't have to pay for it. If your happy dealing with HMRC yourself in the event of an inspection (which could be a day, but equally can take weeks or even months, taking you out of the business for the duration) then bin it off. You say its poor value given the cover and risk, but don't state the cost or the level of cover, so none of us can really compare for you there.
With regard to xero etc, they're all only as good as the quality of the info that is fed it:
Do you know which items are/are not allowable for corporation tax deduction? Are you flagging these for your accountant? If not they're having to go looking for them each year.
Do you correctly account for items you've paid for in the year but relate to future years (prepayments) and items which you haven't paid for in the year that relate to that year (accruals)
Do you work out the depreciation on all your assets (we know there is a car, are there any more) and update the accounts to reflect it.
These are just a couple of factors. If the answer to any of the above is no, and your xero software is just the equivalent of the bag of messy receipts lobbed on the software, then it's not a couple of hours work a year.
One way to tell how much work they are needing to do is by comparing their end result with what you hand them. If your profit and corporation tax numbers are different to theirs, then additional work has had to be done to what you've handed them = time and cost.
P11d, you can do this yourself if you feel the cost is too high. You will need the online login to start. Details of the car, whether there is private fuel involved, and from there you find the relevant list price (or take it from the previous p11d), Co2 figure, first registered date, engine size etc. You then find the relevant tax rates/class 1a NIC percentages and work out the benefit, complete and submit the return. Keep a copy yourself for your own tax return. Again, £180 probably isn't unrealistic, but you may get it £50 or so cheaper if you shop around.
Fee protection insurance - this is completely voluntary and you don't have to pay for it. If your happy dealing with HMRC yourself in the event of an inspection (which could be a day, but equally can take weeks or even months, taking you out of the business for the duration) then bin it off. You say its poor value given the cover and risk, but don't state the cost or the level of cover, so none of us can really compare for you there.
With regard to xero etc, they're all only as good as the quality of the info that is fed it:
Do you know which items are/are not allowable for corporation tax deduction? Are you flagging these for your accountant? If not they're having to go looking for them each year.
Do you correctly account for items you've paid for in the year but relate to future years (prepayments) and items which you haven't paid for in the year that relate to that year (accruals)
Do you work out the depreciation on all your assets (we know there is a car, are there any more) and update the accounts to reflect it.
These are just a couple of factors. If the answer to any of the above is no, and your xero software is just the equivalent of the bag of messy receipts lobbed on the software, then it's not a couple of hours work a year.
One way to tell how much work they are needing to do is by comparing their end result with what you hand them. If your profit and corporation tax numbers are different to theirs, then additional work has had to be done to what you've handed them = time and cost.
Very fair illustrated response mate as I don't employ an accountant to DIY submit to HMRC any more than I'd recommend home surgery to save a few bob at BUPA !
I am not saying I don't expect to pay a fair rate - they are professionals and take liability. They certainly have to check through things - this is what they sell, as experts. They then present the figs in the most tax advantageous way based on the full picture and add their skills and tricks of the trade in this area. Core business not bonus extras.
What price in sifting half a dozen Entertainment out of Subsidence on Xero on any £120k turnover?
£1k, £2k, £3k - we are talking £200 an hour charges really aren't we? So 10 hours work = £2k plus VAT? Bottom line? Fair?
!I am not saying I don't expect to pay a fair rate - they are professionals and take liability. They certainly have to check through things - this is what they sell, as experts. They then present the figs in the most tax advantageous way based on the full picture and add their skills and tricks of the trade in this area. Core business not bonus extras.
What price in sifting half a dozen Entertainment out of Subsidence on Xero on any £120k turnover?
£1k, £2k, £3k - we are talking £200 an hour charges really aren't we? So 10 hours work = £2k plus VAT? Bottom line? Fair?To give you an idea- depending on the quality of your accounts (they sound like they're done well), I'd probably charge you around £1,500+VAT for the accounts, business tax, Companies House, P11Ds and payroll. Nominal fee for the tax returns of £50+VAT each to cover off the BIK issue. Fee protection would be £130+VAT. We're a 2 partner, 20 staff firm with clients ranging from our window cleaner to £30m t/o businesses.
Ken Figenus said:
Very fair illustrated response mate as I don't employ an accountant to DIY submit to HMRC any more than I'd recommend home surgery to save a few bob at BUPA !
I am not saying I don't expect to pay a fair rate - they are professionals and take liability. They certainly have to check through things - this is what they sell, as experts. They then present the figs in the most tax advantageous way based on the full picture and add their skills and tricks of the trade in this area. Core business not bonus extras.
What price in sifting half a dozen Entertainment out of Subsidence on Xero on any £120k turnover? £1k, £2k, £3k - we are talking £200 an hour charges really aren't we? So 10 hours work = £2k plus VAT? Bottom line? Fair?
If it was as simple as sifting through entertainment for half a dozen entertainment receipts then surely you’d put them to one side and show them separately, and save yourself yourself £2k?!I am not saying I don't expect to pay a fair rate - they are professionals and take liability. They certainly have to check through things - this is what they sell, as experts. They then present the figs in the most tax advantageous way based on the full picture and add their skills and tricks of the trade in this area. Core business not bonus extras.
What price in sifting half a dozen Entertainment out of Subsidence on Xero on any £120k turnover?
£1k, £2k, £3k - we are talking £200 an hour charges really aren't we? So 10 hours work = £2k plus VAT? Bottom line? Fair?Like I said above, there’s a lot of factors that determine how much work they have to do. You seem to know what you’re doing, but haven’t said whether you do all the things in my previous post, and all the rest I’ve not bothered to list.
If you’re doing all this for them it’s a very simple job and the time spent (and therefore charges) should be minimal. If not, they don’t sound unreasonable depending on the size of the firm you use. If they’re charging £200 an hour then I’d say maybe try at a smaller firm with lower fees. You gain nothing from an auditor/accountants name on your books unless someone else needs to see it.
Have just skimmed the thread but read the OP. Another poster has posted his estimate, so I’ll do the same for reference.
I agree that individuals VERY often think they are helping by doing the BK themselves but I would say 80-90% of the time cause more problems - you may well be in the 20%, I’m just stating my experience.
I also agree with Eric that it’s very much how long is a piece of string, however, I would look to charge £1,000 for annual accounts. £80 for P11d. £100pp director returns.
I am a single person business, in early stages, but also deal with clients ranging from local barber earning £10k pa to £10m+ T/O business being my largest client, and everything inbetween!
I agree that individuals VERY often think they are helping by doing the BK themselves but I would say 80-90% of the time cause more problems - you may well be in the 20%, I’m just stating my experience.
I also agree with Eric that it’s very much how long is a piece of string, however, I would look to charge £1,000 for annual accounts. £80 for P11d. £100pp director returns.
I am a single person business, in early stages, but also deal with clients ranging from local barber earning £10k pa to £10m+ T/O business being my largest client, and everything inbetween!
MaxFromage said:
To give you an idea- depending on the quality of your accounts (they sound like they're done well), I'd probably charge you around £1,500+VAT for the accounts, business tax, Companies House, P11Ds and payroll. Nominal fee for the tax returns of £50+VAT each to cover off the BIK issue. Fee protection would be £130+VAT. We're a 2 partner, 20 staff firm with clients ranging from our window cleaner to £30m t/o businesses.
This, id charge the same roughly. Gassing Station | Finance | Top of Page | What's New | My Stuff