Think carefully about what you’re receiving for your money. A Chartered Accountant is likely to be considered “normal” in the eyes of many small business owners. Examine the value you’re getting from your accountant before shopping around to reduce your accounting fees.
Take a look at the following two examples:
Example 1: Your accountant charges you $3,500 a year to generate monthly management accounts as well as end-of-year tax reports and so on. During this time, they provide you with general business advice and advice on how to lawfully reduce your tax bill (by way of an online publication like we do). If you implement even a few suggestions, you’ll see a noticeable improvement in your internet company. And as a result, you’re working less and fishing more!
You’ll have to pay $1,750 for the services of your accountant when you submit your taxes. The lack of regular administration reports means you’re missing out on any possible early warning flags.
The choice is between accountants 1 and 2. Which of these is most valuable to you?
Most of the time, business owners ask for my advice on how to get their accountant to provide a value-added service. Here are a few examples of what I mean:
Ask them if they have any recommendations for accounting software and organize your financial data.
For example, if your accountant has to contact you to get a missing bank statement or payroll tax return, you may be charged more since most charge an hourly rate (rather than flat fees). You should keep all of your financial institution data, deposit records, check stubs, and invoices in some kind of order and cleanliness.
* It’s better to keep things simple than complicate them. Sometimes, all you need is a basic set of financial statements. A common request from clients is to have a slew of transactions coded to a slew of different account transaction codes. This additional effort adds to accounting costs for many small businesses and is frequently unnecessary.
* Keep your personal and business expenditures separate. Create an account with your financial institution and make the most of it by paying all of your company’s invoices from it. Many people fail to keep track of business expenses and then make a tax claim for those expenses. Keep receipts and make a brief explanation of what you spent your money on each one. Instead of taking erratic cash withdrawals, consider adding yourself to your company’s payroll.
*Even if you despise accounting, you can always hire a professional to hold your reins during your absence. See whether your accountant has guide-holding employees or hire a component-timer. Your accountant’s junior accounting staff may be able to assist you, and their fees may be less than those of senior accounting staff. In the end, you’ll save money and time since they’ll be able to execute the task quicker and better than you can.
* Consult with your accountant before making major business decisions or investments. Making poor business decisions that negatively impact your company’s financial performance may be highly expensive, especially if you have already made them.
*Your accountant should have the ability to arrange a reimbursement plan for you if you are getting behind on your GST and PAYE returns.
* Talk to your accountant every few months or so to seek advice on how to improve your internet company. Early warning signs and proven business practices are too important to disregard for your internet company’s sake.
You may think of a “cheaper” accountant as a short-term option, but long-term consequences are often overlooked. The market is plenty with accountants who can assist you if all you need is a little math aid. However, you must see your accounting fees as an important source of income.
To ensure that your Chartered Accountant provides you with more than just bean-counting, here are some suggestions I hope you may put to good use.