Do you prefer to pay your accountant monthly?

[MyAccountantOnline]

I've been contacted by quite a few new clients lately who have told me they actually prefer not to pay monthly.

I'd be very interested to hear views from fellow UKBF users whether you prefer to pay your accountant monthly or just once a year.

 

[YODspica]

I prefer yearly, but the client said he could only do it on a monthly basis, so I took it. And after getting used to it I like it better.

 

[John85]

I prefer paying monthly. Helps with cash flow.

 

[gordano]

If ordering services frequently (eg monthly) then I would expect monthly invoicing. If the services are annual (e.g accounts) then I would expect annual invoicing.

I guess for many businesses a key factor will be cash flow, are you invoicing them monthly in advance for annual accounts services?

 

[DeanCo]

Most of my clients prefer to pay for all work done seperately, as it arises by fixed fees per job. I know some people prefer to pay monthly as it gives more time to pay and spreads the cost evenly.

 

[Jenni384]

Nicola, I have experienced the same as you; I had a prospective new client recently say they are thinking of moving from their current accountant as they don't like the idea of paying monthly in advance. Many people are quite happy to pay monthly though.

We offer a choice of either monthly or annual in order to accomodate everyone as much as possible.

 

[MyAccountantOnline]

Nicola, I have experienced the same as you; I had a prospective new client recently say they are thinking of moving from their current accountant as they don't like the idea of paying monthly in advance. Many people are quite happy to pay monthly though.

We offer a choice of either monthly or annual in order to accomodate everyone as much as possible.

I have actually been quite surprised as for some time most clients have found monthly payments a real bonus and its rare now that us accountants dont offer it but it seems peoples views are possibly changing?

Offering pay monthly and annual billing is clearly the best option as one size doesnt fit all but it'll be interesting to see others views on this

 

[Findermonkey]

We pay our accountants monthly in advance as it helps with cash flow, no other reason.

 

[MyAccountantOnline]

We pay our accountants monthly in advance as it helps with cash flow, no other reason.

Can I ask do you have a choice or is that the only way your accountant charges?

 

[Findermonkey]

Can I ask do you have a choice or is that the only way your accountant charges?

Yes as far as I know we have a choice but it makes sense for us to pay the fee over 12 months interest free.

 

[KM-Tiger]

I pay annually, but in different circumstances having a choice would be good.

 

[MyAccountantOnline]

so pay to your accountant monthly.

Not quite sure I understand what you mean

 

[longleaf1]

Yearly for me. I suppose i could pay each month but all it would mean is extra paperwork! I can see how it would help cashflow but my accountants fees at the end of the year arent really much to worry about!

 

[MyAccountantOnline]

Yearly for me. I suppose i could pay each month but all it would mean is extra paperwork! I can see how it would help cashflow but my accountants fees at the end of the year arent really much to worry about!

Thank you I appreciate what you say - would it be too cheeky to ask as a ball park figure what you pay each year?

 

[longleaf1]

No problem, I pay just under 800 a year give or take a bit. That's year end accounts, vat returns and 2 director tax returns. I know there's probably cheaper but I trust her and she was great with the zillion questions I had when I started up in 09

 

[MyAccountantOnline]

No problem, I pay just under 800 a year give or take a bit. That's year end accounts, vat returns and 2 director tax returns. I know there's probably cheaper but I trust her and she was great with the zillion questions I had when I started up in 09

Thank you very much - the sole reason for asking was to get some idea of the level of fees you are happy to pay on an annual basis.

A good accountant is (bias opinion here) in my opinion a very worthwhile investment and its great you have a good one.

 

[longleaf1]

Totally agree, I had all the usual worries such as can we afford it etc but its not until you actually get one you realise how little you know and how great they are at saving you tax! For instance I would have paid myself a full salary and only bothered with dividends if it felt neccesary at the end of the year. Big mistake that would have been!

 

[Working First Aid]

Monthly payment for me - Just fits my own financial personality...

 

[MyAccountantOnline]

Many thanks to all who have replied....food for thought

 

[Christine Hough]

I went to an online accounting system, believing it would be better to pay monthly and then the annual accounts bill would be much cheaper.

I don't think it is any cheaper and I am not sure whether it is because my accountant does not trust their software and therefore downloads it all to her systems and so I have to pay as much as if I were just sending her spread sheets.

I am thinking of changing at the end of this accounting year (end of June) and to go back to spreadsheets rather than paying twice over.
However if we could pay for an online accounting package which the accountant also used reducing their fees. I would prefer this, pay monthly and have everything there.

 

[MyAccountantOnline]

Thanks Christine.

I am actually very surprised that your accountant hasnt reduced your charges for you assuming you are keeping accurate and well kept records using your online system.

If a client keeps good records it does reduce the time it takes to prepare the year end accounts and most accountants will pass on the saving.

Spreadsheets are (generally) horrible to work from and I'd prefer well kept records anyday

 

[Doodle-Noodle]

Goodness ...... £800 a year for everything? I'm currently paying my accountant £120 per month .... I do the VAT returns, all the book keeping and keep accurate records of everything, he's just (supposed) to be doing the Inland Revenue stuff but he failed to submit our last tax return which I'm nt happy about although he did say he'd pay the fine ............ have I been had (again?)

 

[Jenni384]

Goodness ...... £800 a year for everything? I'm currently paying my accountant £120 per month .... I do the VAT returns, all the book keeping and keep accurate records of everything, he's just (supposed) to be doing the Inland Revenue stuff but he failed to submit our last tax return which I'm nt happy about although he did say he'd pay the fine ............ have I been had (again?)

The price may be high, it may not be, it depends on exactly what is involved and no two businesses are the same.

Certainly a failure to submit the last tax return is not a good sign! It really is very easy to change accountants if you wanted to and it wouldn't hurt to speak to a few just to see what other options you have.

 

[Christine Hough]

Thanks Christine.

I am actually very surprised that your accountant hasnt reduced your charges for you assuming you are keeping accurate and well kept records using your online system.

If a client keeps good records it does reduce the time it takes to prepare the year end accounts and most accountants will pass on the saving.

Spreadsheets are (generally) horrible to work from and I'd prefer well kept records anyday

Only comparing one accountant with the next that I transferred to after switching to online accounting. But this costs me £24 per month and the accountants bill is much the same as my previous one!

Yes, Meticulously kept!! : )

I think it is to do with her down loading them to her system rather than using their software to create the year end accounts .. although it is all there.

 

[MyAccountantOnline]

Only comparing one accountant with the next that I transferred to after switching to online accounting. But this costs me £24 per month and the accountants bill is much the same as my previous one!

Yes, Meticulously kept!! : )

I think it is to do with her down loading them to her system rather than using their software to create the year end accounts .. although it is all there.

I'd definately discuss it with your accountant - its certainly very old school to do it like that now and could be costing you unnecessary fees.

 

[MyAccountantOnline]

The price may be high, it may not be, it depends on exactly what is involved and no two businesses are the same.

Certainly a failure to submit the last tax return is not a good sign! It really is very easy to change accountants if you wanted to and it wouldn't hurt to speak to a few just to see what other options you have.

I'll second that

 

[Indivijewelistic]

I prefer to pay monthly and not get hit with one big bill at the end of the year. It helps me budget throughout the year. I do that with most of the business payments, electricity, water rates, business rates, even the shop lease is paid monthly in advance.

 

[JohnnyCash]

We pay our accountants monthly in advance as it helps with cash flow, no other reason.

Yes as far as I know we have a choice but it makes sense for us to pay the fee over 12 months interest free.

I'd certainly hope it was interest free if you were paying in advance!

 

[Mr Blinky]

As a small relatively small business the chance to pay monthly was great as allowed us to forecast a bit more accurately, although at the same time keeping money in the account until we need to pay it would be a bonus so a bit of swings and roundabouts really, although over all I feel monthly is a benefit for both sides in terms of predictability and security?

 

[getsetgonline]

I prefer to pay annually.....just personal preference, no other reason!

 

[MyAccountantOnline]

I prefer to pay annually.....just personal preference, no other reason!

Can I ask very roughly how much you pay? The sole reason is to guage what sort of figure people are happy to pay annually.

 

[internetspaceships]

My accountant does everything for us with ten staff on the payroll. We do our own VAT and we give the accounts to him via Sage quarterly.

We pay monthly on a fixed price for the year. There are no fees for extra advice or anything at all.

 

[longleaf1]

Goodness ...... £800 a year for everything? I'm currently paying my accountant £120 per month .... I do the VAT returns, all the book keeping and keep accurate records of everything, he's just (supposed) to be doing the Inland Revenue stuff but he failed to submit our last tax return which I'm nt happy about although he did say he'd pay the fine ............ have I been had (again?)

I know its not a bad price at all!
Reasons its a bit cheaper i think - Our records are kept pretty spot on! Although turnover isnt miniscule at 150k ish there are not loads of records as work is high value so there are not lots and lots of £5 receipts!
+ my accountant works from home so she hasnt got premises overheads or anything.

 

[internetspaceships]

The fee can be based as much on number of transactions as turnover.

Getting a good solid relationship with the accountant helps a great deal too. One with a business head as well as a bean counter head is invaluable.

I've never been one to have an accountant who bills per phone call or per piece of advice because provided you don't take the mickey and call him or her every day or week, they are actually "retained" by you after all.

 

[KateCB]

We pay annually, however we have a fair idea what the bill will be, so we put it away in a reserve savings account monthly.....so it earns us a little bit of interest and is there for when we need it!

 

[Strontium Dog]

Just to illustrate my perspective, I am a qualified accountant who also runs several businesses, so I can see it from both sides of the coin.

The main problem is that the provision of accountancy advice is a continuous service, however there is a a definite "bulge" at the year end when the year end glossies are produced. Therefore how is the accountant adequately rewarded for their ongoing work, when for example the client phones with a bookeeping or tax query, unless there is an element of monthly payment. From the clients perspective however, why should they pay upfront for the year end accounts work?

I have never really liked the system where the bill is split into 12, an invoice rendered every month matched by a SO from the client. You cannot really link the invoice with what work has actually been done, and it gets messy if accountant and client part company mid year. Good for the accounatants cashflow though. What do you do about sets of accounts o/s at the start of the arrangment - bill them on top?

Probably the best compromise is work out roughly how much work will be invoiced over the next 12 months, divide by 12 and collect that amount by SO on a monthly basis, but only raise invoices as work is actually done. The effect will be rather like your utilities account where you are always in credit or in arrears depending on where you are in the annual billing cycle. However this disadvantages the accountant where there is immediatley a full set of annual accounts to do, as it will take quite a few months for the client to get ahead.

Just my two pennart - horses for courses I suppose. I think some, especially smaller, clients would appreciate paying monthly. Also from the accountants perspective if the client is not willing to pay as they go, one has to ask - do they intend to pay at all?

 

[MyAccountantOnline]

Just to illustrate my perspective, I am a qualified accountant who also runs several businesses, so I can see it from both sides of the coin.

The main problem is that the provision of accountancy advice is a continuous service, however there is a a definite "bulge" at the year end when the year end glossies are produced. Therefore how is the accountant adequately rewarded for their ongoing work, when for example the client phones with a bookeeping or tax query, unless there is an element of monthly payment. From the clients perspective however, why should they pay upfront for the year end accounts work?

I have never really liked the system where the bill is split into 12, an invoice rendered every month matched by a SO from the client. You cannot really link the invoice with what work has actually been done, and it gets messy if accountant and client part company mid year. Good for the accounatants cashflow though. What do you do about sets of accounts o/s at the start of the arrangment - bill them on top?

Probably the best compromise is work out roughly how much work will be invoiced over the next 12 months, divide by 12 and collect that amount by SO on a monthly basis, but only raise invoices as work is actually done. The effect will be rather like your utilities account where you are always in credit or in arrears depending on where you are in the annual billing cycle. However this disadvantages the accountant where there is immediatley a full set of annual accounts to do, as it will take quite a few months for the client to get ahead.

Just my two pennart - horses for courses I suppose. I think some, especially smaller, clients would appreciate paying monthly. Also from the accountants perspective if the client is not willing to pay as they go, one has to ask - do they intend to pay at all?

Thank you very much Strontium Dog - its super to hear views from someone such as yourself. I do appreciate what you say

 

[DeanCo]

I have never really liked the system where the bill is split into 12, an invoice rendered every month matched by a SO from the client. You cannot really link the invoice with what work has actually been done, and it gets messy if accountant and client part company mid year. Good for the accounatants cashflow though. What do you do about sets of accounts o/s at the start of the arrangment - bill them on top?

Probably the best compromise is work out roughly how much work will be invoiced over the next 12 months, divide by 12 and collect that amount by SO on a monthly basis, but only raise invoices as work is actually done. The effect will be rather like your utilities account where you are always in credit or in arrears depending on where you are in the annual billing cycle. However this disadvantages the accountant where there is immediatley a full set of annual accounts to do, as it will take quite a few months for the client to get ahead.

Just my two pennart - horses for courses I suppose. I think some, especially smaller, clients would appreciate paying monthly. Also from the accountants perspective if the client is not willing to pay as they go, one has to ask - do they intend to pay at all?

My thoughts exactly. I cannot put it any clearer myself.

I have always wondered about the feasibility of charging monthly. The workload can vary considerably every year, even every month, depending on clients circumstances and requirements i.e. many companies have wild fluctuations in number of orders, turnover and employees. Compounded to this some companies prefer to do there own vat returns and bookkeeping and pass this work on to the accountant at busy times.

Charging monthly may work for some companies, but for others it could get rather messy.

 

[KateCB]

"Also from the accountants perspective if the client is not willing to pay as they go, one has to ask - do they intend to pay at all?"

I think thats unfair, if I do a job once a year (as my accountant does) then I expect to get paid for that job when it is done, once a year. I wouldn't use an accountant who wanted monthly payments upfront, end of story - as I said I divide what I think the bill will be basd on historical data, stick it into a reserve savings account, get my 0.25% or whatever it is these days and pay the bill in full when it arrives.

I, like others prepare everything, VAT. P35, Self assessments, P&L, balance sheet so my accountant needs only to check and put the figureds into HIS software to produce the 'glossies'.

I think in the 12 years I have used him, I may have called him one a year in addition to the annual accounts conversation, and for the fees charged for checking, a small amount of data entry and producing 6 sets of accounts, his annual fee covers his title (chartered) more than the actual time spent doing my accounts.

Thats said, I am not belittling my accountant at all, he calls in for coffee and brings the biscuits, he is a genuinely good person, offers advice at year end if he feels it appropriate and ribs me about my 'OCD accounting' as he says I worry too much about the little oddities that seem to escape - pennies due to rounding etc!

 

[MyAccountantOnline]

"Also from the accountants perspective if the client is not willing to pay as they go, one has to ask - do they intend to pay at all?"

I think thats unfair, if I do a job once a year (as my accountant does) then I expect to get paid for that job when it is done, once a year. I wouldn't use an accountant who wanted monthly payments upfront, end of story - as I said I divide what I think the bill will be basd on historical data, stick it into a reserve savings account, get my 0.25% or whatever it is these days and pay the bill in full when it arrives.

I, like others prepare everything, VAT. P35, Self assessments, P&L, balance sheet so my accountant needs only to check and put the figureds into HIS software to produce the 'glossies'.

I think in the 12 years I have used him, I may have called him one a year in addition to the annual accounts conversation, and for the fees charged for checking, a small amount of data entry and producing 6 sets of accounts, his annual fee covers his title (chartered) more than the actual time spent doing my accounts.

Thats said, I am not belittling my accountant at all, he calls in for coffee and brings the biscuits, he is a genuinely good person, offers advice at year end if he feels it appropriate and ribs me about my 'OCD accounting' as he says I worry too much about the little oddities that seem to escape - pennies due to rounding etc!

Thanks Kate thats just the sort of comments I wanted to hear ie from a clients perspective.

I think its clear from many of the responses that its very much divided on how people like to pay ie monthly or on an annual basis (its up to us accountants to sort out how we deal with it) but a choice to suit the client seems the way forward.