Home – New Forums Money matters Accounting fees – nearly choked on my coffee!

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  • #965444
    kattatecopywriter
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    Hi everyone,

    Wow – so I just called an accountant whom I was referred to, to make an appointment to chat about my business etc.

    Well I nearly choked on my coffee when he said his rate was $400 per hour!!

    Am I being really naive about this, or is $400 per hour a ridiculous amount?!

    Could anyone advise what would be a more realistic fee?

    Thanks (time to clean up the coffee spill!)

    #1011964
    FletcherTax
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    Unfortunately that is within the norm. Normal hourly charge out rates for a senior/partner/director are from $200 to $800 per hour depending on the size of the firm and their particular niche.

    If your in Sydney, feel free to give us a call for a no obligation chat.

    We don’t charge for an introduction meeting. It’s only fair that we introduce ourselves to each other and see if we click. Nothing worse than an accountant you feel you can’t talk to and always second guess tax answers in hope of preventing excruciating fees.

    Fletcher Tax Accountants
    http://www.fletchertaxaccountants.com.au

    #1011965
    Warren Cottis
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    Well Kat

    Let’s look at this another way… this accountant has pre-conditioned you and pre-qualified you as to his/her position which is smart from their point of view.

    So this could now be the best $400 you spend because if you go for it you will definitely:

    * have researched your topic via Google

    * will have all your questions documented and

    * will unquestionably speak twice as fast as you normally would

    Now, would you do all that if you were going in for a free consultation? Perhaps not.

    It’s not the price that matters, its the value you get.

    It’s also a two way street and after 15 minutes if synergy is not happening then there is no reason that you should not say that you do not feel that you are both on the same page if you feel that is the case. The response from the accountant then will clearly tell you whether you are dealing with a switched on business person or a bean counter.

    #1011966
    Julia Nitschke
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    Hi

    I do know firms in that ball park and to be honest you would be lucky to have a junior billed out at less than $130 an hour, and if they are that junior, its a waste of your time and money. A decent accountant can set you back a few hundred dollars an hour and if you get to a higher partner level at a reasonably large firm with a many partners, $400 an hour is not too bad.

    Having said that though, I do understand for small businesses it makes a big dent in our budgets!

    Just a thought though, remember that the really expensive person does not necessarily do the work. If you have an initial consultation with a high level partner or senior, it is at the huge rate. But any work or set up that comes out of the meeting is usually done by a junior staff member and you should get billed accordingly.

    Regards

    #1011967
    FletcherTax
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    I think it is very important to distinguish between initial consultations and actual work being done for the client.

    I personally think it is unfair to charge a client anything for getting to know them and seeing if the synergy is there, as posted by Warren.

    No actual work or specific advice is provided during this consultation. Big firms charge for consultations as they need to bill out at least 90% of their day. And what luck to bill for having a chat!?

    Also the consultation is very helpful to the accountant. You check if we are right for you but a good accountant should check if you are right for them. You may not be the type of client they specialise in and may not be efficient for them to take on, or realistically be able to help.

    I like to think of it as an informal meeting. You meet, discuss what you seek from one another and go from there.

    A decent accountant does not have to cost an arm and a leg. You need to approach an accountant who specialises in your industry or business structure type (and hopefully both!). Unfortunately, the money you are charged does not determine quality.

    Fletcher Tax Accountants
    http://www.fletchertaxaccountants.com.au

    #1011968
    yunari1
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    Pay peanuts get monkeys but those rates do seem quite high.

    Of course as mentioned it depends on what you are being charged for. In my practice we only charge for tasks completed. Time spent in discussion etc via phone/fax/email is not charged as a way to encourage clients to ask questions before taking important tax decisions.

    Anyways would be happy to discuss fees etc. If so, you can find my contacts as website.

    Cheers,
    Darren
    http://www.yunari.com.au

    #1011969
    LeelaCosgrove
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    I suppose it depends – what are you getting for your $400 / hour?

    If it’s a 10:1 return … i.e. for ever hour you spend $400 on, you get $4,000 less of a tax debt, then it’s a freaking AWESOME investment.

    It’s not about the cost … it’s about the value …

    #1011970
    peppie
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    My apologies if I offend any accountant types (and web designers) here. But I guess I am just simply passing on my own experiences.

    I have a friend who in his own business reckons that you-have-to-talk-very-slowly-to-accountants-to-be-sure-they-understand-you! My summery of experiences over many years is that in business and increasingly also in personal life too, you need to know exactly how an accountant does their job – simply so that you can tell them exactly what you want them to do.

    Maybe I am just being cynical, but I find I need to question everything in the same way I might question my doctor. Because if they make a mistake and/or give me the wrong steer I still have to pay the price (and the penalty). I have taken the view that I am better off finding out as much as I can about money matters rather than spending money on “expert” advice. In fact, I think you would be better off spending the money doing an accountancy course.

    I have made the same decision recently in regards to web site design. I am presently in the process of learning for myself how to do it. That way at least if I strike something that it would be better to get someone more experienced to do for me I at least know the language to talk and how to write the treatment. So that when the result is NOT delivered the way I asked for it to be, I will then know what it is that I didn’t get!!!!!

    #1011971
    LeelaCosgrove
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    It’s true, Paul, that it takes time to find great suppliers.

    It took me five years to find my accountant and four to find my web designer – but both are freaking AWESOME. My accountant is expensive but brilliant – he understands what I need and TELLS me … we have ongoing conversations in which he explains to me what needs to be done and how. He is currently starting up a total back office solution and I’ll be handing all of my financial stuff over to him – THAT’S how good he is (I would NEVER trust my money with just anyone!).

    My web designer is ridiculously cheap for the quality and expertise she provides.

    I guess you just have to keep looking to find the right people AND you need to be willing to pay whatever they ask when you find them.

    #1011972
    peppie
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    Yep, Leela I can’t disagree with you, but as I said my experience has made me just a bit of a cynic. For example, I have wasted a HUGE amount of time over the last 2 years just trying to get the kind of web site I need. Which is why my site is presently not very good, but very soon should be much better.

    I too am always on the look out for Good People and if they can do the job better and easier than I can,,,, you beaut. I know that on some tasks I will find the solution but it might take me many times longer.

    I guess that has also made me realise that I need to provide the same service to my clients and make sure I am giving them the best options and guidance I can to help them with the best solutions for their needs.

    #1011973
    tevs
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    Having spent time with a cheaper accountant than what you have been quoted, I have now moved to a lot more expensive central Melbourne accountant and it has been worth every penny.

    My previous accountant cost me money and offered no advise with the business going forward, his meeting before end of financial year was very poor and as a result of this he lost me as a client. New accountant different matter, proactive has given me advise and yes charges the earth and only wish I could charge like him but has already saved me money.

    I would say buy the best accountant you can and stick with them. You need a pro-active one. My new one spent several days with me trying to get to know my business and the profit drivers so that he could give the best advise. This was all off his own bat and gave great advise.

    #1011974
    cwm67
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    why would any one deal with some one who charges by and quotes by an hourly rate , ask for a flat fee deal , there are plenty of small firns that will give you a flat fee arrangment with no or small charges for short discussions or all inclusive arrgnements.

    #1011975
    FletcherTax
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    In a perfect world, flat/set fees would be fantastic. But, businesses change and what they do within their business activity changes from one year to the next, not to mention the legislation changing from one year to the next. Hence it is very hard to put a definite price on a particular job.

    To counter this issue, accountants issue what are called Engagement Letters, which are letters describing what they will do and their estimate for such a task with a clear paragraph following that explains that extra work/issues found during the process/task/job in comparison to the previous year, will incur additional fees at the time of billing.

    Accountants may often not disclose that they charge by the hour but it is definitely a criteria they consider before quoting you a ‘set fee’.

    Fletcher Tax Accountants
    http://www.fletchertaxaccountants.com.au

    #1011976
    Terence@Epic
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    I think one of the fundamental issues that small businesses often fail to consider is the distinction between bookkeeping, tax accounting and business consulting. As a former junior tax accountant at a large firm, I was fortunate enough to have been involved in all 3 aspects and as such, am able to comment on certain pitfalls that clients make.

    Julia’s post re junior accountants charging approx $130 ph is accurate. A significant amount of budgeted fees go into “getting a clients books in order” which frankly, is work much more suited to a bookkeeper.

    I do believe in the value of paying good money to get a good accountant/business adviser. Alot of work goes behind the scenes to approach and assess a business from a holistic p.o.v.. One method my former firm used to utilise to get its customers to understand this process was to (1) package all the paperwork involved into these huge boxes, (2) place, at the top, their BS/P&L/Assorted reports together with a compliments slip, in a nice thin folder and (3) offer to courier the entire thing back to them.

    That said, my Brisbane-based, non-profit organization assists bookkeepers with disabilities find work. Our services start from $145 per month and would be more than happy to discuss this. We are suited to micro/small business bookkeeping and are meant to assist with “getting your books in order” before presenting them to a professional services firm.

    Oh and to add to Fletcher’s last post, Engagement Letters and projected fees are two things accounting firms try their darndest to adhere to. In many firms, though this is a discouraged practice, alot of overtime goes into client work in order to meet budgets (esp with businesses with fast moving and dynamic business models). I strongly doubt that any accountant relishes the idea of calling up a client to request more money!

    #1011977
    SOUTH EAST ACCESS
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    Terrence is right. Split your work between bookkeeping ($35-45/hr), tax preparation (junior stuff at between $90 and $130/hr) and advisory work ($250 is cheap and $400 is more like it). Do as much of the first two as possible. The later will help you understand your business better anyway. But for heavens sake, get an accountant that explains what the numbers mean and how you can change the numbers to your benefit. If your accountant just does tax returns, get another one!

    You may be interested to know that most accountants don’t like doing book work. They enjoy far more give advice and helping to grow your business.

    Like all professions, let people do what they enjoy and you will get a better outcome

    David Stephens

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