Accountant Fee Query

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Deleted member 48191

  • #1
    I've a small limited company and I got a quote from an accountant was was reasonable, then after a few months he handed me a bill for £3,000 as there was more work involved than he thought then he increased his monthly fee by £100.

    Has this ever happened to anyone before and is he justified to do this.

    I really was not expecting this.
     
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    Deleted member 48191

  • #3
    This is the reply

    The fees were increased as the number of documents presented differed
    dramatically from the number of items we originally discussed and expected.
    In addition to this there was addition complexity of a high level of time
    involved due to the number of transactions in punts. Extra time is needed to fully reconcile this into sterling as this is not just a matter of letting a
    program convert documentation; There are clear legal and tax issues
    involved. All of these factors increased the work four fold. Even though the volume increased not all the work has been charged.

    Some of my recepipts are in euros and therefore a currency exchange issue as well
     
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    David Griffiths

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    • Jun 21, 2008
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  • #4
    It seems a lot for a small company, but really depends on what you do for yourself and what the accountant does for you. If the accountant is doing basic bookkeeping, that's unlikely to be cost effective if they are charging full normal hourly rates. Some people have a separate bookkeeping arm, or there are independent bookkeepers to do this.

    There's also the question of whether you got a quotation or an estimate.

    It does seem to be a bit of a hike, but it's difficult to tell without knowing more. Small means different things to different people, and the organisation of records and information varies hugely

    Some of us will stick to the fixed prices that we agree, provided that you do what you agree. If things are miles out, it's good practice to agree an amended price before doing the work. People get less upset that way. :)
     
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    Deleted member 48191

  • #6
    they have me a breakdown of the fees, to me it seems a bit much handing me a bill for £3k after agreeing on a price

    our business operated 1 day a week its a private medical service

    we did hand in a lot of receipts initially that was after we got the quote

    now our paperwork is reduced
     
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    wood1e2

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  • #7
    Whats the break down then?

    And how much Foregin exchange was mentioned prior to work commencing and who much was there after the work commenced? If that is the main reason for the increase in costs.

    Or how many recipts was agreed prior and how many did you actually give in?
     
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    Deleted member 48191

  • #8
    wood1e2 said:
    Whats the break down then?

    And how much Foregin exchange was mentioned prior to work commencing and who much was there after the work commenced? If that is the main reason for the increase in costs.

    Or how many recipts was agreed prior and how many did you actually give in?
    Click to expand...

    yes the forgign exchange was mentioned, no agreement was made on the amount of receipts.
     
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    CassioAcc

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  • #11
    Did you get terms of engagement? Horefully there is a section in there on fees ( ie What was agreed and how additional work is charged).

    In my opinion, it is not good practice to rack up extra fees over and above what was agreed without first discussing with the client.

    It does sound a lot but without knowing the detail it is difficult to comment.
     
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    accountancyextra

    accountancyextra

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  • #12
    It's actually quite difficult to say if £3k is too much as we haven't got full possession of all the facts. Certainly, if a number of invoices were presented in a foreign currency, then there will be more work involved in producing the accounts.

    I'm not sticking up for them though. As David has already said, it's bad practice to do this. Even the top firms use a 30%, 70% rule where they review the work to see if they are on budget, so not sure why these guys didn't?

    What was your original quote?
    I'm presuming at the orginal meeting you must have discussed volume of paper or something for them to provide a quote. If that's the case, how different was the actual volume of work.

    I think you'd be best arranging a meeting with the partner to discuss your concerns and how you can move forward. It may be possible to reduce the fees going forward by changing the way you present your paperwork to them (eg by employing the use of a bookkeeper).
     
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    Deleted member 48191

  • #25
    To clarify the inital quote was £117 per month, then I was given an invoice for £3,000 plus a monthly increase in my book keeping fee bringing my monthly fee to £251.65

    The £3k fee was because documentation which was over four times the expected amount. Although not all the work was charged for this did present a considerable increase to what was expected. This was further complicated with records and adjustments having to be made in two currencies. This has given rise to the increase in book-keeping charges.

    The paperwork has now been reduced.

    All receipts are handed over in dated envelopes, they contain mostly travel expenses and a few consumables.

    Sales per month about 20 clients we only open 1 day a week.
     
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    Jenni384

    Jenni384

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    • Oct 1, 2007
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  • #26
    vas_guy said:
    To clarify the inital quote was £117 per month, then I was given an invoice for £3,000 plus a monthly increase in my book keeping fee bringing my monthly fee to £251.65

    The £3k fee was because documentation which was over four times the expected amount. Although not all the work was charged for this did present a considerable increase to what was expected. This was further complicated with records and adjustments having to be made in two currencies. This has given rise to the increase in book-keeping charges.

    The paperwork has now been reduced.

    All receipts are handed over in dated envelopes, they contain mostly travel expenses and a few consumables.

    Sales per month about 20 clients we only open 1 day a week.
    Click to expand...

    A fixed quote can only be based on information provided by the client. If on receipt of the work, it appears the colume of work far exceeds that stated in the quote, it is reasonable for the accountant to charge more.

    That said, wherever possible (e.g. it may not be possible if there is a tight deadline and info is provided at the last minute) the accountant should make the client aware as soon as they can about an additional fee. That they didn't do this, especially given the jump, is very bad practice, imo.

    Speak to them, and get an explanation of why they didn't advise you of the fee increase before they carried out the work.
     
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    GillespieBS

    GillespieBS

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  • #29
    Shame on this so called accountant..

    I think the unbelieveable bit about all this is that an accountant is there to add value to your business. If you see the business won't be able to afford your bill then why not suggest a better way forward.

    Book-keeping is 90% of the work and the year end accounts/co sec work/tax filing is the 10% (obviously depending on the size of business!). It's wading through receipts and analysing or posting that takes the time and can be done by the owner/administrator/receptionists to some degree. As an accountant/business adviser, he could have acknowledged this and agreed to train you or someone else in your business to follow there process and agree to review it.

    This approach leaves the accountant more time to earn an honest buck and the business director/client with more of his profits.
     
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    GillespieBS

    GillespieBS

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  • #30
    vas_guy said:
    I would love to try the bookkeeping myself, but I be afraid I mess it up.

    How do I start doing the books myself, what needs to be done, I would feel comfortable having a pro check them before I submit them.
    Click to expand...

    Based on what I have just posted:

    1. Choose a good accountant - you can usually have an intial consultation for free so fil your boots (but look for recommendations)
    2. Pay a little up front for a bookkeeping course/training from your accountant using a system familiar to them and that suits you and your experience.
    3. Engage the accountant to review your accounts monthly, quarterly, or annually depending on your requirments as well as the year end statutory requirements.

    HTH
     
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    David Griffiths

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    • Jun 21, 2008
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  • #32
    GillespieBS said:
    Shame on this so called accountant..
    Click to expand...

    That's a bit harsh, especially without knowing exactly what is involved. The OP has already said that he asked the accountant to do all of the bookkeeping, that the transactions were complex, and that the volume of transactions were much higher than originally expected.

    It is quite possible that this is a fair charge for what the accountant has done. Whether the OP could have saved money by doing it himself is irrelevant - he chose not to, and that in itself is a valid choice.

    Perhaps the accountant should have gone back to the client at an earlier stage to warn that costs would increase, but we don't have the letter of engagement, and we don't know if the original price was an estimate or a quotation.

    Yet it's a case of "shame" and "so called accountant". Perhaps you need to consider both sides of this situation.
     
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    GillespieBS

    GillespieBS

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  • #33
    I know what you are saying and yes I need to know more about the engagement to judge but the one thing I can tell is there is an unhappy client. The accountant isn't here to back up his side (unless you want to own up David ;-)) however, if there is an unhappy customer the supplier needs to look at themselves and say 'did he really understand what he was letting himself in for?'

    If he had done, the accountant would have suggested him doing some of the work himself and the OP clearly is happy to give it a go now he understands the costs.

    I suppose I am lucky, all my customers know the what the bills look like before the work is done.
     
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    wood1e2

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  • #34
    I would say that getting an accountant to do your books is always going to be expensive. As they are accountants and by experience/qualifications charge more. It is only fair, whether there time is spent making tea or tax advice, their time costs the same.

    Get a bookkeeper, or learn to set up and run your books yourself then get an accountant to sign them of, or do it yourself if straight forward...plus a few other elements :) the cleaner the more correct the books are at the end of year the less it will cost you...well unless the accountant charged one fee for year end no matter what!!! As they seem to around here!!

    You can also build a relationship with your bookkeeper, so they get to know your way of working, if they are experienced/qualified enough they can certainly help all the way to year end.

    Use an accountant for what they are qualified to do, end of year/Tax Advice/Business advice/audits/Other business finance advice. Then you will be charged their rate, which you may still disagree with, but it is the rate you pay for experience, etc etc etc.
     
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    Deleted member 48191

  • #35
    paultnl said:
    Book-keeping made easy
    I don't work for them they just make my life easy.
    Click to expand...

    I had a look at that, it may be what i'm looking for as I'm a small business, I see clients every week and they pay me for their consultation there and then, I pay for my consumables up front so I do not owe any bills, my rent, etc is by direct debit.
     
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