Accounting Fees, I imagine paying them would be right up there with the paying the dentist after a tooth extraction; Painful, and expensive. Maybe that’s why my subconscious led me to study accounting. It was self preservation!
I’ve often thought about having to pay for my own accounting work. I’m sure I’d have a few less entities and be one of those people who does as much as they can to reduce the fees. So now here I am, blowing the lid on the industry. I feel like one of those masked Magician’s on those shows from a few years back where they exposed the Magician’s tricks fearing the wrath of the industry, and sideways looks at the next Magician’s conference in Vegas. If only I had a cape.
So without further ado. Here are 6 ways you can reduce your accounting fees
This is one of the big areas to get right, not only can it save you in accounting fees, but it can also reduce your tax, and reduce the risk of fraud.
Using a simple yet comprehensive checklist will ensure you’ve got everything you need in a logical order. No more digging around in a shoe box or scrolling through a hundred emails to find the information they need in the order they need it. Your accountant will love you and how organised you are. Yours will be a job they look forward to working on. This will make your accounting much easier and much cheaper.
Also don’t send information to them in multiple emails or hard mail (please, please try not to post things, they end up scanning it in anyway, which you guessed it, costs you more), get it all together and send it in one big email or upload it to your dropbox or other online document management system and send them a link.
Great bookkeeping isn’t expensive, it’s the best value investment you can make in your financial administration. The best bookkeepers are now offering fixed price monthly packages. Stop paying for hours, pay for results.
Having reliable, timely and accurate financial information is fundamental if you want a successful business, its also a key component to accounting costs. If you’ve got sloppy bookkeeping and a messy accounting file, your accountant needs to fix, its costing you money. Its cheaper to pay a great bookkeeper than it is to pay an accountant to fix bookkeeping errors.
There’s always been this natural competitive relationship between bookkeepers and accountants, each wanting to blame the other for any errors. The best bookkeepers and the best accountants have a contrasting view and see both functions working in harmony. Not sure if your bookkeeper or your accountant is the trouble? Get a second opinion. You can do that here.
If you’ve just been sending your information to the same place for a few years, and have played along with the “same price as last year plus a bit game”, you’re probably paying too much. Ask them if they can sharpen their pencil, ask them what you can do to help reduce the work they need to do and thereby reduce the cost to you. If you don’t ask, you don’t get, and in my experience most accountants don’t want to have the “fee discussion” with people. They’ll usually avoid it and take a few hundred (or thousand) off the price just to keep you happy. It would be a rare day, they would rather take $0, than a smaller fee.
Gone are the days of sending your work in with a blank cheque and crossing your fingers it was the same price, or less (hahahahaha), than last year. Any accountant who is worth their salt has moved to fixed price services. Ask how much its going to be before they start the work and lock them in. Do note however if there are things you want done that are extra, then expect an extra bill, but again, lock that extra work into a fixed price, before they do it. Scope creep is the most difficult concept in all of this for both sides, but make it clear at the outset, what you expect to be included in the price. Get it in writing and both parties know what’s in and what’s out. Things like “unlimited phone calls & emails in regards to this” are always bones for contention, so make it as clear as possible what that actually means and get it in writing so you can refer to it if ever needed rather than trying to recall what was said on a phone call.
If there are queries from your accountant, make sure you respond quickly, like the same day. Once accountants send off that query email or give you a call and you go away and look into it, they move onto someone else’s work. When you do finally get back to them, they have to pick up your file (once they finish whatever they were working on) and re-familiarise themselves with where it was up to. This may come as a shock, but you are not their only client, so the details of each job sometimes get blurred with another job, so they need to reacquaint themselves each time there is a stoppage. Sadly, you are just another widget to grind so picking up & putting down your file slows everything down and drives up the cost. If you’re one of these clients, who dribbles info in, continually misses requested information or takes weeks or months to get give an answer you are probably paying the pain in a*rse premium. Stop being a pain the a*se and get organised.
Do you have unnecessary entities? A balance sheet full of inter-entity loans, or a million pieces of plant & equipment? Complicated group structures and large volumes of transactions will necessarily drive up the price. There is more work to be done, accounts to be reconciled, and complex tax entries (such as Division 7A, FBT, GST, tax consolidation and many more) required. If your group structure isn’t a work of minimalist art on a page, with easily defined ownership and control lines, then it’s costing you more. Consider shutting down entities that aren’t doing much. It’s usually cheaper to set up a new one in 3 to 5 years when you need it, than to keep one dribbling along. Talk to your accountant or us about simplifying your structure. Get them to work on it, it might cost a bit to get it sorted now, but you’ll save on your ongoing annual fees.
If you’ve done all the above and you’re still paying the same amount, its time to shop around. You can start right here.