Accountants rates?

Discussion in 'Askaboutbusiness' started by denby11, Jun 15, 2017.

  1. denby11

    denby11 Frequent Poster

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    32
    Hi
    I have a limited company trading for the last 7 years. The accounting firm that does my returns is a distant relative and I'm starting to think he is screwing me. We have a turnover of just under 800k and I employ a accounts person who manages all my accounts, does vat,paye etc. She has everything prepared for my accountants all they have to do is put everything together and audit the accounts? Everything is done off site I never meet him. At the end of the year when he has accounts compiled we have tele conference for abound half hour going through all the figures.Last year he charged me over 6k+vat.A person in the same industry as me with a similar turnover got all this work done for 2k which I thought was very cheap.He charges me a load of extras such as filling return to revenue €600. What is the going rate?
     
  2. cremeegg

    cremeegg Frequent Poster

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    Last edited: Jun 16, 2017
    Accountancy fees vary enormously. In the not too distant past accountants, sorry Accountants, wore very good suits and charged huge rates. Nowadays some Accountants, sorry accountants wear jeans, and some of them don't charge very much at all.

    There are three costs involved for accountants. Time, responsibility and regulatory burden.

    The time involved for the basic work varies hugely. It depends on how much work your accounts person leaves undone. Some businesses process their accounts to a very late stage, others give their accountants bundles of invoices. Some even do lots of unnecessary work. It also depends on the complexity of the business. Your turn over might consist of dozens of invoices to each of several hundred customers every month, or just a few big ticket items. Similarly with suppliers. Some businesses have very detailed stock records, others very simple. This work really doesn't cost very much per hour to the accountant. If they were paying a trainee €10 per hour I would be surprised. They could charge you €15 for that or of course they could charge you €80.

    By responsibility I mean the use of professional skill, judgement, experience. When the trainee has done all the work, an experienced accountant should consider the overall result. They may look at your file for an hour say, "thats all fine" and charge €1,000. Of course they may say, "there is a problem here", and they may as a result save you a lot more than €1,000.

    Finally there is the regulatory burden faced by accountants. That is a real cost which is beyond your control and individually beyond the accountants, though why they dont collectively resist the burden is a mystery to me.

    It is impossible to say if €6k is excessive. Tell your accountant you are concerned with the cost. Probe what your accounts person is doing and not doing. Ask if some change in their work could reduce the cost involved for the accountancy firm.

    The year end half hour tele conference concerns me. Is that all the interest the accountants have in your business. Maybe they think it all the interest you have. Why are you not demanding a greater level of business advice. Any competent accountant should be able to talk for hours giving you business strategy advice after doing your years accounts. Some of that talk may be wide of the mark, but an outsiders perspective on your business should be invaluable.

    In short, if you want cheap you are probably overpaying. If you want good advice and support, you don't seem to be demanding or getting it.
     
    Last edited: Jun 16, 2017
  3. T McGibney

    T McGibney Frequent Poster

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    That's a remarkably good post, @cremeegg. Well done.
     
  4. Redone

    Redone Frequent Poster

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    62
    Hello,

    Is your accountant finalising and filing accounts or is he actually auditing them. With a €800k turnover you'll most likely not need an audit, unless you're claiming government grants etc.

    An audit will take considerably more time and has more responsibilities. If an audit is not actually being carried out, you may be paying on the high side.
     
  5. Dr.Debt

    Dr.Debt Frequent Poster

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    428
    Some Accountants do good work and can add considerable value to a small business. Unfortunately for that profession, there is an over supply of accountants in this country and fee levels have plummeted dramatically in the last twenty years. At a guess, I believe that you will have no problem in finding a good practitioner to complete the work for €1500 - €2500 per year.
     
    Ravima likes this.
  6. Ravima

    Ravima Frequent Poster

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    2,239
    tell your current lad you're putting the task out to tender as you have been advised to do so. Then shop around. I have a pal who changed accountants, to be told by the old lad, that they had a new deal coming out 'next year'. However, he moved to get immediate savings.
     
  7. NewEdition

    NewEdition Frequent Poster

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    115
    I would agree with the tender.. list out all the tasks your current accountant does and actually contact some abd see what you get back in responses.