Accountant's fees for start up company

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Strongback

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I started a new business about 18 months ago and appointed an accountant to set up the company up and look after the accounts. My first set of accounts were submitted recently and I have now received an invoice from the accountant for €4000 plus VAT for the accounting period Nov 2007 to Dec 31 2008.


I did not get a fee quote from the accountant at the beginning as I was introduced by a friend. I got the I'll look after you don't worry fee quote. :)

The company had 3 employees and a turnover of around €200,000 last year (won't be half that this year).


A breakdown of what the accountant did is as follows:


· Set up the limited company. This was done by an independant company who charged a fee of €400 plus VAT. The €400 is not included in the accountants fee of €4000.

· Registered the company with the CRO.

· Corporation Tax return.

· Abridged accounts.

· B1 annual return to the CRO

· Provided payslips when we requested them. We requested payslips three times during the year.

· Happily answered any telephone queries we had.

· 4 meeting in the accountant’s office when setting up the company and finalising accounts.


We did the following:

· Filled and returned all P30 and P35 returns to the Revenue.

· Kept detailed records of all VAT purchases and sales.

· Kept detailed expenses records.



Can anyone tell me if €4000 is a reasonable fee for above work. I was hoping it would be more around €2500.

Cheers
 
Too high in my opinion...you're doing most of the donkey work yourself, I would agree that E2,500 would be a more reasonable fee.

However, for the first year of accounts, maybe a more "hands on" approach was provided by the accountant and therefore the fee could be justified.

Going forward your fee should be around the E2,500 in my opinion, based on the info presented in your post.
 
Difficult to know, and although you say you did most of the work the quality may not have been 100% eg you make no mention of a a bank, debtor or creditors reconciliation.

If you have concerns about the fees I think you should talk to you your accountant in the hope of getting a discount but also to let him/her know that you are very cost conscious and perhaps agree on a fee for next year.
 
It's a buyers market out there.
Not only was 2,500 more realistic, but there should also be a new business discount. Haggle, haggle, haggle. All our clients are...
 
Thanks for the responses much appreciated

jack2009 wrote "you make no mention of a a bank, debtor or creditors reconciliation."

I dealt directly with the bank and made all lodgements and withdrawals. I passed the bank staements to the accountant. There were very few transactions and our invoices tended to be large. I am not sure what debtor reconcilliation is exactly but we chased down and brought in all the invoices debts.

We had every transaction on spreadsheets including a cheque book log.

I have no problem with the service we receive it is very good. I just think from listening to general chat that the price I am being charged is a bit rich. I should have got a fee quote, I have to fee quote for everything so I should have known better. I think starting your own company is daunting and I was happy to have a friendly accountant help me through it.

I will haggle I just want to be sure of my ground.
 
I agree. €2,500 would be much more reasonable but I'm sure you could do even better again. We offer discounted fees for new business start ups too. So there are certainly accountants out there who can offer you a more competitive fee. Perhaps if you mention this to your current accountant, they may be inclined to discount that fee in order to retain your business.

Bank, debtors and creditors reconciliations relate to bookkeeping. There can be be a lot of time involved in bookkeeping and this can vary from company to company, depending on the number of transactions that each company has. However, you have said that the number of transactions for your company is small, so the bookkeeping element of the work should not have taken too much time in that case.
 
If the accountant indicated to you what way they wanted you to keep the records and you presented them in that fashion then the bookkeeping element required as part of their end of year work should be reduced. However if they didn't say and you didn't ask and proceeded to keep the records as you thought was best, but that turned out not to be as they needed them and they then had to reanalyse or otherwise re order the records then the bookkeeping element in their fee might be high. Also you mentioned that you did the P30's P35 but they provided you with payslips, who did the payroll? If they did it then you are being charged for that and going forward it is something that you could do yourself easily. It may be difficult to reconcile the initial fee with what would be fair for the work done without better understanding of how the records were presented. However going forward, you need to have clear lines as to who does what and what is to be charged for. A proper letter of engagement ( which you should have been provided with initially anyway ) would set the terms of the engagement of the accountant and who does what.
 
Graham_07

We showed the accountant how we were presenting our information on Excel spreadsheets and he was happy with this.

The business is a consultancy and had the following transactions:

- Approximately 15 invoice payments

- Purchases were office stationery along with computers and furniture at the beginning.

- Utility bills - gas, electricity, telephone/broadband and mobile phones.

- Company car payment.

- Wages were paid by bank stanging order and as we were all office based and had a company car there were very few expenses.


As previously stated the accountant looked after setting up the company.


I have no doubt I did a lot of the donkey work but lets just say the scenario was that the accountant did everything should I be charged €4,000?
 
From the additional information provided I would say yes there are many accountants who would have charged less than that fee. The difficulty in your case is that your accountant may have set a charge out rate higher than others for similar work and without you checking beforehand and having some outline of the fees it is difficult to back track on that now. That being said, as previous posters mentioned, a word in their ear might be in order. If you expect to continue trading and they hope to retain your business as a client then a reduction in the fee might be in order. Alternatively you discharge this fee and find someone whose fees are closer to your expectations for the work to be done.
 
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