One of the biggest questions in your mind when you start talking to an accountant is likely to be how much does it cost to do my accounts? And it’s a perfectly reasonable question.
Your time is short, your money is precious and you don’t want to waste either talking with a prospective accountant only to find that you’re miles apart when it comes to price.
Unfortunately there is no simple answer. Which I know is incredibly unhelpful. However, the reality is that every business is different and there are numerous factors which impact price.
It’s a bit like asking a builder how much it will cost to build a house without showing them the plans. Are you building a first home or a luxury townhouse? You could live in either one, but there is a vast difference in specifications, cost to build and the final product.
That’s why we take the time to talk with you first so we can understand your business and what you really need. Then while we're together, we use the GoProposal pricing calculator to collaboratively and transparently work out your accounting fees.
Although I haven't been able to give a direct answer to your question, I don't want you to feel like you’re walking in blind on fees. So let’s take a look at the factors which influence the cost of accounting fees. I’ll also share the services and pricing for two hypothetical clients.
What factors influence the cost of accounting fees?
At Trio, we take a methodical and transparent approach to pricing our services. We take into consideration a number of different factors including the level of complexity, size of business, and quality of records. Using a pricing calculator enables us to price consistently and fairly instead of taking a 'stab in the dark' approach.
Two other key factors which impact the pricing are:
1. Age & stage
Businesses in the early stages are usually focused on getting bills paid, putting systems in place, and getting to grips with taxes. Usually these clients start out with basic compliance and some accounting support.
As businesses grow, they require more advanced reporting and assistance to help manage cashflow, drive growth and increase revenue. That’s when we start to meet more regularly and provide additional services to help as the business grows. Naturally accounting fees go up, but our clients quickly find the benefits outweigh the additional cost.
2. Level of ongoing support & advice required
We find that most of our clients either want a proactive accountant and the ability to ask questions when they crop up, or they are seeking sound business advice and coaching to help them grow their business. After talking with you, we recommend a level of support that’s right for you and your business.
Keep in mind that if you’re unhappy with the lack of proactiveness from your current accountant then part of the issue could be that you’re not actually paying for any advice. Changing accountants and expecting a better level of service for the same level of fees is unlikely to result in a happier you.
But my accounts are are all on Xero: how hard can it be?
Prospective clients sometimes think that because they are on Xero, they’ve done all the hard work so the accountant just needs to press a button and hey presto it’s all done. While we love Xero, the level of artificial intelligence isn’t at a point yet where that can happen.
As accountants we need to verify that the information in Xero is accurate and correctly classified. Something as simple as the bank feed dropping off for a couple of days, or recording income as a receive money transaction instead of matching up against an invoice could distort your profit and result in you paying too much or too little tax.
Scenario 1: Accounting fees for a small consulting company
Mike started his marketing company eighteen months ago. He provides social media marketing services to a select group of clients. Storia Ltd is GST registered, has a turnover of $150,000, and Mike is the sole shareholder/employee. Mike takes care of his GST returns and bookkeeping but wants to know that he is doing everything right while paying as little tax as possible. He likes to be able to ask questions when they come up, and definitely doesn’t want any surprise tax bills.
For this hypothetical client, we would recommend the following package for Mike:
- Annual accounts & tax return for the company
- Tax return for Mike
- Tax planning – with a forecast of expected tax ahead of the January provisional tax payment
- Xero & Accounting Support of up to 2 hours/year
- Xero Business Edition Subscription
For all of this, Mike is expecting to invest $220 - $265 + GST/month
Scenario 2: Accounting fees for a growing small business
Sara also owns her own marketing company. Ingenue Ltd is a full service marketing and design company with a team of five. Ingenue has a turnover $750,000 and has experienced significant growth over the past year. Ingenue has an experienced part-time bookkeeper who takes care of payroll, bank recs, invoicing, accounts payable and GST returns. Sara is keen to continue this growth and is looking for more proactive advice and support to help her achieve her goals.
In this scenario, we would recommend the following package for Sara & her hypothetical company:
- Annual accounts & tax return for the company
- Tax return for Sara
- Tax planning – with a forecast of expected tax ahead each provisional tax payment, ensuring sufficient tax is being put aside through-out the year.
- Xero & Accounting Support of up to 2 hours/year
- Xero Business Edition Subscription
- Virtual CFO support – meeting quarterly to review financial results, cashflow, progress on 90 day plans and cover any other relevant business challenges such as people, risks, sales & marketing.
For all of this, Sara is expecting to invest $430 - $500 + GST month
Your business might fit one of the scenarios above. Or you might want a different mix which could include bookkeeping, GST returns, budgets and cashflow forecasts, regular financial reporting, or an advisory board member.
We build our proposals based on the specific needs of each business and can adjust the level of service as required. You also don’t have to do everything at once, we often recommend a roadmap of services which can be added when the time is right for your business.
Choosing an accountant is not just about the fees
Finally, like most buying decisions there is more than just price to consider.
The best accountant for you will be someone who you can relate to, easily communicate with, and trust. They will have the skills to do more than just help you cut costs. They should be able to help you increase revenue, provide sound business advice and help your business to grow or become more profitable. You should feel like the value they bring to your business exceeds the fees you pay.
We'd love to have a chat to see if you and Trio are a good fit. You can book a free discovery call here and we’ll be happy to provide a personalised quote for the accounting services which are right for your business.
