Home Forums Money matters Never used an accountant – is this too expensive or just right?

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  • #991442
    cameronpsych
    Member
    • Total posts: 7

    Hi all,

    I’m transitioning from a sole trader to a company (me and one other as employees). I have never used the services of an accountant before, having done bookkeeping and tax lodgement myself, but now is the time to use one.

    For a bit of background – I am a Psychologist, working across multiple offices and projects, I keep my own records (Reckon) and will have one other employee of the company.

    I have been quoted at $2500 for a year of accounting including returns, ASIC compliance etc. Essentially they say that they will do everything that will be required on the taxation side. Being new to it I don’t know whether this is in the ballpark of what I should be paying, or if it is too high, or indeed a great deal.

    Any help would be greatly appreciated.

    Cheers
    Cameron

    #1181576
    James Millar
    Participant
    • Total posts: 1,702
    cameronpsych, post: 211798 wrote:
    Hi all,

    I’m transitioning from a sole trader to a company (me and one other as employees). I have never used the services of an accountant before, having done bookkeeping and tax lodgement myself, but now is the time to use one.

    For a bit of background – I am a Psychologist, working across multiple offices and projects, I keep my own records (Reckon) and will have one other employee of the company.

    I have been quoted at $2500 for a year of accounting including returns, ASIC compliance etc. Essentially they say that they will do everything that will be required on the taxation side. Being new to it I don’t know whether this is in the ballpark of what I should be paying, or if it is too high, or indeed a great deal.

    Any help would be greatly appreciated.

    Cheers
    Cameron

    We have annual reporting packages for small companies starting at $1975. Bookkeeping is excluded.

    I don’t think their price is a long way from the mark if they are a decent firm.

    Helping build better businesses and better lives with expert financial and taxation advice. info@360partners.com.au www.360partners.com.au 03 9005 4900
    #1181577
    Adam Hodgson
    Member
    • Total posts: 47

    I have two companies and pay around the same rate per company. You need them to be proactive and provide more than just the lodgement and compliance services for that rate; they should also be providing financial advice.

    #1181578
    cameronpsych
    Member
    • Total posts: 7
    JamesMillar, post: 211802 wrote:
    I don’t think their price is a long way from the mark if they are a decent firm.

    That’s what I was thinking, for the work that they will be doing I figure that it is around a good quote. I will start out with them for this year and see how they go and then move if I’m not happy.

    #1181579
    cameronpsych
    Member
    • Total posts: 7
    Adam Hodgson, post: 211803 wrote:
    I have two companies and pay around the same rate per company. You need them to be proactive and provide more than just the lodgement and compliance services for that rate; they should also be providing financial advice.

    Ok, so you think more than just the necessary and more so being able to show me where to put my money etc, not just ticking boxes? Thanks for the response!

    #1181580
    Eastern Connection
    Member
    • Total posts: 20

    I think you need to find an individual accountant, rather than a firm, and then you could half your cost.

    In posts like these, people always say “you get what you pay for”. Ideally, we would all always pay for the best service, but we need a middle ground – pay something you are comfortable for a service that is good enough.

    I just had a discussion with a friend about his accountant. He has a company doing rather complex real estate transactions. He invests into RE through his company, has several properties in his portfolio, so there are sale/purchase/capital gains, income, loans to consider. Enough complexity. His costs him just over $1000 a year. He swears by her.

    I think you should ask around for a recommendation.

    #1181581
    cameronpsych
    Member
    • Total posts: 7
    Eastern Connection, post: 211834 wrote:
    I think you need to find an individual accountant, rather than a firm, and then you could half your cost…

    I think you should ask around for a recommendation.

    I do agree, there is a point when I pay far more than is worth my while, and I suppose this is what I am concerned about, there is a balance point there. As a small business I don’t want to be paying big business rates for this kind of work.

    Shopping around at the moment..

    #1181582
    ThexArm
    Member
    • Total posts: 253

    Just to clarify few things in this discussion, there are different kinds of accountant services.

    1, Tax Accountant – These guys provide year end tax accounting services – although this service has been made easier by the ATO for Individuals it is still very much a compliance area and businesses compulsorily need accountants to do this work. So, when it is a compliance work it is little bit dearer.

    2, Bookkeeping – These guys provide day to day transactional accounting services like setting up accounting systems, data entry, reconciliations, paying customes, sending invoices, collecting money from customers, P&L, Balance sheet, GST compliance and BAS returns etc.

    3, Management Accountants – These guys work with business owners to streamline the business systems and procedures, provide deeper analysis into the products, prices, Break even analysis, bench marking, KPI setup, Budgeting and forecasting, Sales reports, Gross margin reports, important project work intended to grow the business, strategic discussions, Cash flow projections etc.

    In larger companies these services are specialized and separated but in small businesses these services are jumbled up. Almost all accountants and bookkeepers claim to provide all services. But, for the amount of clients they take up it is hardly possible to cater their time and focus to management accounting services. Growing a business these services are most important. These are forward looking and using these you direct your business to go to a specific point by following a plan (budget or forecast) on monthly and yearly basis.

    So, if someone charging you $2500 would not able to cater a lot of their time to provide services to grow your business on monthly basis. They expect you to do most of day to day transactional work and growing your business. They would provide you advice as and when you ask them. More like a reactive service than proactive service.

    It all comes down to the business owner how serious they are to grow their business. It is important for them to realize the importance of their time and where should they invest that time.

    Money is all but relative to the kind of services you get.

    #1181583
    cameronpsych
    Member
    • Total posts: 7
    ThexArm, post: 211866 wrote:
    So, if someone charging you $2500 would not able to cater a lot of their time to provide services to grow your business on monthly basis. They expect you to do most of day to day transactional work and growing your business. They would provide you advice as and when you ask them. More like a reactive service than proactive service.

    It all comes down to the business owner how serious they are to grow their business. It is important for them to realize the importance of their time and where should they invest that time.

    Money is all but relative to the kind of services you get.

    Thanks so much for your comprehensive reply, I am starting to get the feeling that the quote is a bit high for what I need. Like I said earlier, the quote is from a big company and I feel that I will be charged for their reputation and, as others have said, I may be better served by a smaller company/individual who can do the same thing but work more closely with me.

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