Accountant Doubling Fees

[Sean Lee-Amies]

Situation: Been with an accountant for a long time, they were doing payroll and accounts/corp tax. We had an in-house bookkeeper who wasn't great and often the accountant would have to sort out some messes. They never once complained about this. I would have used their bookkeeping services but can't justify their £60 an hour rates. We just replaced our bookkeeper with a new accounting and bookkeeping firm but kept the old accountant in place. I didn't think it was fair to just up and leave them when they've supported us all this time.

Previously our bookkeeper was doing most of the payroll, the accountants were just sort of rubber stampig it and processing the payment - but we were charged the full cost of payroll. I moved the payroll to the new accountant/bookkeeping company.

Yesterday I was told by my long term accountant that their fees were doubling and just for accounts/corp tax it was going to cost £165 p/m +VAT.

They said:

"This is for two reasons; the lesser reason is small annual increases as the fees have not changed over the past couple of years. The second reason is on review of the last couple years, time spent on the accounts has exceeded the fees by a fair margin. The initial fees quoted were on the lower end of what we would normally charge which is why the increase now is quite large unfortunately."

I asked what tasks they had to spend so much extra time on, they said:

"This was largely due to how everything is posted into Xero. Errors in the banks, errors in the vat etc. All of this required extra reconciliation/ review. There were also issues with the intercompany, but this shouldn’t be an issue going forward."

They have never mentioned needing to charge extra at any point and now all of a sudden we're being expected to pay double. Typically they are quite a hands off company. I have to chase for much input beyond "we need X for your tax return" and "your tax return is done". Not a huge problem, they just feel quite distant.

I'm not particularly bothered by all this, although the new accounting/bookkeeper previously quoted £47 p/m for what we are now going to be charged £165 p/m for.

I just wondered what other people's opinions are? If any!

 

[Gyumri]

The answer is to vote with your feet.

 

[Ziggy2024]

They are saying that they have to make a lot of corrections on the end of year that they've not charged you for so are now trying to recoup some of the lost time.

It's essentially a failure of communication from them. Did they ever attempt to train you and highlight any deficiencies within your bookkeeping?

You have the choice not to accept the increase or have a discussion with them about how you could lower the price.

 

[Sean Lee-Amies]

They are saying that they have to make a lot of corrections on the end of year that they've not charged you for so are now trying to recoup some of the lost time.

It's essentially a failure of communication from them. Did they ever attempt to train you and highlight any deficiencies within your bookkeeping?

You have the choice not to accept the increase or have a discussion with them about how you could lower the price.

I told them about our bookkeeper early on and asked if we could pay them to spend a bit of time monitoring what they were doing to make sure everything was being done properly.

They said that's not a service they offer and that was pretty much the end of the conversation.

They never gave me any training but did spend some time with our bookkeeper, however I was told regularly that it resulted in more confusion on both sides as their instructions were a little confusing for multiple people that ended up trying to smooth everything over (from our side).

 

[Ziggy2024]

I told them about our bookkeeper early on and asked if we could pay them to spend a bit of time monitoring what they were doing to make sure everything was being done properly.

They said that's not a service they offer and that was pretty much the end of the conversation.

They never gave me any training but did spend some time with our bookkeeper, however I was told regularly that it resulted in more confusion on both sides as their instructions were a little confusing for multiple people that ended up trying to smooth everything over (from our side).

So I would interpret this as they were making money from the payroll which offset the accounts time. When you moved the payroll they had to up the fee for the accounts.

Your bookkeeping may be poor but it sounds like you've tried your best to help them and they haven't kept up their side (obviously we haven't heard the other side so always a caveat).

I would agree with Gyumri that it may be time to move on. A good professional relationship works both ways.

 

[Sean Lee-Amies]

Thanks all, I appreciate the input.

 

[Baines Watson]

Agree with the other comments on here, communication is key in this relationship and if you felt they were distant and perhaps not supporting you in the way they should have been in your opinion then perhaps it is time to move on.

One thing I would add is that if your accountant is simply checking your bookkeeping and processing your returns then they are not doing anything more then what a bookkeeper could do, where is the accountant value add ?

Did they provide you with any proactive advice on tax planning strategies or assisted in financial management ? A good accountant would make sure they add this value to you to justify their fees otherwise why pay them when you can hire a bookkeeper to do all that at a much cheaper rate.

 

[Sean Lee-Amies]

They liaised with our bookkeeper, they did the end of year accounts. I asked for more input on tax efficiency but - without any form of interaction with myself - they were confident that everything was as tax efficient as it could possibly be.

I wasn't involved in any form of "strategy" (something I love!) if there was any of that going on. I don't harbour any ill will, they did help us out a lot early on but then over time the relationship seems to have grown stagnant. I don't have any form of monthly or quarterly meetings or anything like that.

 

[Baines Watson]

They liaised with our bookkeeper, they did the end of year accounts. I asked for more input on tax efficiency but - without any form of interaction with myself - they were confident that everything was as tax efficient as it could possibly be.

I wasn't involved in any form of "strategy" (something I love!) if there was any of that going on. I don't harbour any ill will, they did help us out a lot early on but then over time the relationship seems to have grown stagnant. I don't have any form of monthly or quarterly meetings or anything like that.

It seems from your response that even though you were their client, not the bookkeeper, they didn't interact with you very much. I'm not sure how they can make the determination that everything was tax efficient if they didn't sit down with you and go over the details of your personal and financial situation ?

I'm not saying you need to call your accountants daily / weekly but it is important that there is an open line of communication when needed. It is important to have at least quarterly catchups to ensure everything is on track re your financial and tax position especially given the current environment where tax changes are coming at us thick and fast.

 

[Daybooks]

Why not do all the bookkeeping, calculate and submit your quarterly VAT Returns, complete and submit your annual accounts to Companies House in the prescribed format and to applicable accounting standards and submit same along with properly computed Corporation tax returns, all yourself?

It sounds like it will save you approximately £2,000 a year; what would that make your hourly rate? It’s your choice! Good luck with your decision.

 

[cjd]

I suspect they've had a review of their clients and charges and decided that you're more trouble than you're worth. You're spreading accountancy services all over the place, so from their point of view it's maybe not the kind of business they want.

You could ask them to quote for an 'all service deal'. Bookkeeping, accounting, payroll, tax etc. You might find that works out better for both of you.