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7 ways to pay your accountant less

Using a Chartered Accountant and paying their accounting fee is often considered a normal part of running a business. It’s important for you to consider what you’re getting for your money.  Before shopping around to reduce your accounting fees, compare the value that you’re receiving from your accountant.

Let me elaborate with some examples:

Scenario 1: You pay $3,250 during the year for monthly management accounts and statutory tax returns. Over the year, you’ve made a couple of ‘phone calls and been given some practical business advice. After following some of the advice, you increase your profit margins by 15% p.a. with very little extra effort.

Scenario 2: The only time you talk with your accountant is at tax time and your accounting fee is $1,750. You receive no monthly management accounts to identify any early warning signs and you receive no advice at all.

Which accountant do you recognise? Which accountant will give you more value?

I am often asked how people can receive even better value from their accountant.  Here’s a list of just a few things you can do:

* Get them to explain how you could organise your financial information better and how accounting software would help you.

* Most accountants charge for their time (in 6 or 12 minute units) and therefore if they have to contact you to locate missing records your accounting fees will increase. Retain your bank statements, invoices, cheque stubs and deposit books and keep them neat and tidy and in order as your accountant will need them.

* Keep it simple.  If you simply need a basic set of financial statements and tax return, tell your accountant.  We are often instructed to prepare detailed financial statements using a client’s complex chart of accounts. This additional work adds to their accounting fees and is often unnecessary for most small businesses.

* Separate your personal and business spending. Open a new account with your bank and pay all business expenses from that account as much as possible. Try to avoid paying cash for your business expenses and personal expenses (drawings) as these can add to your accountant’s time. Try to remember to keep receipts and write on each one a brief description of what you spent your cash for.  Consider putting yourself on your payroll as it’s a good financial discipline to get into.

* If accounting is not your strong point, consider getting someone else to do your book-keeping.  If you don’t need someone full time, hire someone on a part-time basis or maybe your accountant has book-keeping staff who can help you.  Accountants often have junior staff doing book-keeping work at reduced rates.  You’ll often find that paying them will save you money as their accounting fees are tax deductible and they should do the job in less time than you will.

* Discuss decisions that will have a major financial impact on your business with your accountant before making them.  Poorly considered business decisions that affect your business’ financial performance may be very costly to rectify after you have made them.

* Speak with your accountant every few months or so to establish feedback on your business’ performance.  The stability of your business and its future health is way too important to take uncalculated risks.

Don’t be tempted to save a few hundred dollars by going to a “cheap” accountant because it is sure to cost you in the medium to long term. If it’s just number crunching you want, there are plenty of accountants out there to help you. But you should view your accounting fees as an important investment.

If it’s value for money you’re after, I hope you’ll use these tips to ensure your Chartered Accountant gives you more than bean counting.


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