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July 21, 2009 at 1:56 am #965212Up::0
Hi,
I think I am at the stage to get professional assistance from an accountant and it almost seems as complex as choosing a phone or internet plan!!!!
What fees do people pay their accounts (monthly or as required)?
What services are included?
What services aren’t included (and how much extra does it cost)?
Would you rate your business small/medium/large? (Obviously the size and complexity of each individuals needs are different … but some general figures would help).As an example I had a quote 12 months ago of $150/month but this doesn’t include extra things like BAS or income tax returns.
In one way it seems rather expensive ($1,800/pa) just so you can call someone and ask for advice. On the other hand $150 would probably only buy 1 hour from a reasonably good professional.Except for:
* be comfortable with your accountant, and
* make sure your accountant can use or get data from your accounting system,
what other advice does anyone have?(Online accountants on the forum are welcome to contact me)
July 21, 2009 at 6:40 am #1010777Up::0Hi Ray,
As with most things there’s no clear answer. It all depends on what, and how much, you want from your accountant. $150/month is a lot if all you’re looking for is an occasional phone call but, as you say, it’s only an hour from a good professional.
It would be hard to quote for something like a BAS as it depends on how (and how well) the books are being maintained – it could take a few hours or be knocked over in half an hour. A time based engagement may be the best solution – this probably accounts for the majority. If you have a good professional, that you are comfortable with, it shouldn’t be in their interest to draw out or delay the job. A fixed price engagement gives you certainly over fees but introduces some element of risk which is built into the fee structure – the accountant is risking not running over the time he/she has estimated for the job to be profitable, and you are risking either not having a job rushed and not professionally completed, as the accountant nears the time estimate, or paying for the accountant for finishing ahead of schedule.
I don’t know if that has been of help to you but the key thing is to know what you want from your accountant (eg financial management or tax advice) and what you can do to make their time as effective as possible – a good accountant will tell you.
July 22, 2009 at 1:34 am #1010778Up::0Thanks Bruce,
So are you saying that most small/micro businesses you know don’t have a contract with an accountant but pay for accounting advice as needed?
Thanks,
July 22, 2009 at 2:55 am #1010779Up::0ray_223, post: 10847 wrote:So are you saying that most small/micro businesses you know don’t have a contract with an accountant but pay for accounting advice as needed?Ray, the way I operate is yes, I would try to have a contract and work regularly with a client. However that would be for regular functions such as management accounts/reports, BAS, board meeting or whatever. That client would be able to ask for advice at anytime.
Non-contract work or advice wouldn’t be excluded – just harder to schedule and subject to workload. This I do an a time basis.
July 22, 2009 at 7:17 am #1010780Up::0Hi Ray,
Interesting questions you raise on the fee basis for your accounting needs. In the last few years in my practice we have moved toward fixed fee arragements or Professional Service Agreements as we like to call them.
In this process we qoute a fixed fee up front for a certain amount of work in the 12 month period, for example we will quote to prepare all your tax returns, BAS and ASIC returns and have 1 tax planning meeting and 1 half yearly results meeting during the year. This is then formalised in an engagement letter detailing exactly what is included in the price you pay. Any work we are engaged to do outside these specifics will be quoted up front prior to commencing the job. The quoted amount is then paid off by the client over 12 months with fixed installments each month.
The reasons and advantages for this method of engagement from both sides as we see it are:
– Gives certainty of fees, our clients know exactly how much it will cost upfront and that will not change on the engaged processes.
– Improves cashflow, for both the client and us, I’m not going to lie it is excellent for our cashflow too.We have had excellent client feedback on these agrements and now have up to 50% of our clients paying on this basis. Some clients are on their 4th year and love it.
In relation the above comments on rushing jobs because they are near budget etc.. I can only speak from my firms point of view but the way fees are paid by our clients has no effect at all on the quality of work or our processes we have in place and I dont beleive this should be an issue. I guess this comes down to the research you do into your accountant and how comfortable you are with their abilities and knoweldge.
Thanks Ray, great topic.
Sam
July 22, 2009 at 8:19 am #1010781Up::0McAdam Siemon, post: 10871 wrote:In relation the above comments on rushing jobs because they are near budget etc.. I can only speak from my firms point of view but the way fees are paid by our clients has no effect at all on the quality of work or our processes we have in place and I dont beleive this should be an issue. I guess this comes down to the research you do into your accountant and how comfortable you are with their abilities and knoweldge.Sam
My comments were only on the possible perception of the client where the work hasn’t been laid out in full and up front.
Sam, I think your approach is the best for all parties and that is also my structure. The key thing is to have the tasks and expectations clearly outlined up front with the client.
Regards,
July 22, 2009 at 7:19 pm #1010782Up::0In our firm, we have chosen to not go with the fixed fee approach, because we’ve found that boundaries often get blurred.
What we do, however, is provide a “typical fee for your… BAS, EOY”, and tolerate phone calls of less than ten minutes. We do keep track of all the time, and square up the time with the billing when we do the end of year accounts. And we also allow the clients to pay monthly, or weekly, and again square it up with eoy. And with a few exceptions, it works out okay.When doing set projects, or providing specific advice such as on leases, or a call takes longer than 10 minutes, we will have a fee discussion. The most important part about this is that the clients know when they first arrive how we fee, and what our “contact tolerance” is, and we re-iterate this in our engagement letter, and our newsletters.
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