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Is cheap accountancy good value?

Discussion in 'Accounts & Finance' started by Maccademia, Mar 6, 2018.

  1. Maccademia

    Maccademia UKBF Newcomer Free Member

    6 0
    This is my first thread so go easy on me!
    I think I'm paying too much for accountancy.
    Present situation - Ltd Company, Turnover £130K, Vat returns, payroll of two, all the usual company tax returns and end of year stuff. Yearly bill £2650 +vat.
    The final straw for me and the reason I am looking at alternatives is that when I asked if it would be better to revert to a partnership as I am expecting this year's turnover to be sub £100k (hopefully margin a bit better) they said they would need to charge me £200 to get an answer. I naively thought that a good accountant would advise on that even before I asked the question?
    Anyway I had a quote yesterday from an online firm using their own bookkeeping software which, on paper covers all the services I am currently getting, for £834 +vat p.a. (this is remaining as a Ltd Company).
    I'd be really grateful for any opinions on a) wether I'm paying too much and b) if anyone has had good, bad or ugly experiences with the online sector.
    Thanks in advance!
     
    Posted: Mar 6, 2018 By: Maccademia Member since: Mar 6, 2018
    #1
  2. GraemeL

    GraemeL Pain in the neck? Full Member - Verified Business

    4,899 1,046
    On the face of it, you have been paying far too much for accountancy.

    My strategy has been to choose the accounting software that I like (happens to be Clearbooks) and then choose an accountant who is a Clearbooks user. I pay for the accounting software my self so I can change accountant easily should it be necessary.

    The question you ask about a partnership could be a complex one, I just dont know if the charge is reasonable or not.
     
    Posted: Mar 6, 2018 By: GraemeL Member since: Sep 7, 2011
    #2
  3. Ian J

    Ian J Factoring Specialist Full Member - Verified Business

    4,526 1,268
    Whether you are paying too much or not depends on how many transactions you have for your £130,000 turnover if your accountants are doing all the processing for you as the cost of processing a dozen transactions a month is much less than for processing 1,000 per month.

    In my own case I have between 100 and 120 invoices a year to process and my accountant charges me £900 plus Vat to prepare and file the accounts, run a payroll for two people and deal with HMRC and she is a bricks & mortar accountant
     
    Posted: Mar 6, 2018 By: Ian J Member since: Nov 6, 2004
    #3
  4. Maccademia

    Maccademia UKBF Newcomer Free Member

    6 0
    It's an ecommerce business so I submit totals of transactions and statements from third party sellers. So there are a few thousand transactions a year but they aren't having to enter them individually
     
    Posted: Mar 6, 2018 By: Maccademia Member since: Mar 6, 2018
    #4
  5. GillespieBS

    GillespieBS UKBF Regular Free Member

    309 43
    The route to a good experience with an accountant is to get your bookkeeping process and system as simple as possible. I don't believe the number of transactions makes much of a difference in this day and age due to bank feeds, rules, automations etc however it tends to come down to number of bank accounts (including paypal, merchant accounts etc).

    If you are not happy with your current bookkeeping then get in front of a few accountants that will suggest some of the popular ones (Xero, Freeagent, Clearbooks, Kashflow - to name a few). If you are able to help make your bookkeeping efficient then your annual bill could be less than half what you are paying now.

    Also, I cannot stand accountants that say you have to pay for them to undertake task to see if you could be more tax efficient (or reduce costs). That should be a natural part of the job when they take you on and then each quarter or year, they should make you aware of any changes etc that may affect you.
     
    Posted: Mar 6, 2018 By: GillespieBS Member since: Apr 11, 2008
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  6. Maccademia

    Maccademia UKBF Newcomer Free Member

    6 0
    I agree, That's what has upset me.
    I haven't ever used an online bookkeeping package. I submit the data to the accountants every Vat 1/4 and they do the rest. Nor have they ever suggested it as a way of reducing the fees....
     
    Posted: Mar 6, 2018 By: Maccademia Member since: Mar 6, 2018
    #6
  7. GillespieBS

    GillespieBS UKBF Regular Free Member

    309 43
    Sounds old fashioned way of dealing with an ecommerce business. If you use the likes of Amazon it will be one invoice for each fortnight (per country) and things like Paypal can be processed as one invoice per month per currency.

    You really need to get yourself set up on a system and if you have the inclination to do some of the bookkeeping yourself then you can save fees.
     
    Posted: Mar 6, 2018 By: GillespieBS Member since: Apr 11, 2008
    #7
  8. Mr D

    Mr D UKBF Legend Free Member

    7,376 768
    Amazon can be done monthly too, date range report on payment screen.
     
    Posted: Mar 6, 2018 By: Mr D Member since: Feb 12, 2017
    #8
  9. Mr D

    Mr D UKBF Legend Free Member

    7,376 768
    On the face of it then it appears you are paying a lot.
    The quote you have from the online firm sounds much closer to what I would expect, my business was only slightly smaller than yours.
    Online sector is as good or bad as the offline sector. Down to individual companies and accountants within companies as to the service you get.
     
    Posted: Mar 6, 2018 By: Mr D Member since: Feb 12, 2017
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  10. STDFR33

    STDFR33 UKBF Big Shot Free Member

    3,517 854
    I can understand it.

    Some clients just want to pay the lowest possible fee for a no frills, compliance only service. If someone is just paying a basic fee for compliance, then that's all they are going to get. I don't see why accountants, or any other professional should give up their time for no remuneration.

    I'm not saying that the OP falls into this category, as the fee seems on the high side - though we don't have all the facts to go on and there could be a number of factors not mentioned that could influence the fee drastically.

    OP - Cheap Accounting is a franchise. I tend to steer clear of franchises at all costs. If you want to reduce your annual accounting costs, shop around. Ensure that the firm is insured and has been around for a while and is reputable (Google works wonders for finding reviews).
     
    Posted: Mar 6, 2018 By: STDFR33 Member since: Aug 7, 2016
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  11. Maccademia

    Maccademia UKBF Newcomer Free Member

    6 0
    Thanks all. I'm getting the clear message that I should be using a cloud based accounting package to cut down on bookkeeping charges passed on to me by the accountant. Then find an accountant who is incorporating that package into their systems
     
    Posted: Mar 6, 2018 By: Maccademia Member since: Mar 6, 2018
    #11
  12. STDFR33

    STDFR33 UKBF Big Shot Free Member

    3,517 854
    Worth giving Kevin a shout at Platform Accounting. Has quite a few e-commerce businesses, and specialises in Clearbooks, an online bookkeeping package.
     
    Posted: Mar 6, 2018 By: STDFR33 Member since: Aug 7, 2016
    #12
  13. Maccademia

    Maccademia UKBF Newcomer Free Member

    6 0
    I realise you don't have all the details but I feel I don't fall into the 'no frills' category and would have expected general advice on incorporation vs partnership from a tax perspective.
    The online firm I have had the quote from states:
    "Unlimited help and advice via Skype, email, phone & live chat"
    "Regular tax efficiency and business recommendations"

    I wonder what that translates to in reality - anyone had any experience of getting further advice on top what must be a 'no frills' service?
     
    Posted: Mar 6, 2018 By: Maccademia Member since: Mar 6, 2018
    #13
  14. STDFR33

    STDFR33 UKBF Big Shot Free Member

    3,517 854
    I appreciate that given the fee that you pay. I was just replying to @GillespieBS in that he doesn't understand why some accountants don't offer this as a matter of course.

    As I say, although Cheap Accounting comes across as large firm, it is actually a franchise.
     
    Posted: Mar 6, 2018 By: STDFR33 Member since: Aug 7, 2016
    #14
  15. GillespieBS

    GillespieBS UKBF Regular Free Member

    309 43
    Yes. I do agree with you that (if you offer) a bronze/no frills package then clients will take it and then perhaps expect more. I don't think I could deliver a service when I know that a client is getting a false economy though.

    It's our job to convince our clients to pay for the right service for their needs. I put myself in their shoes and think how much I would be prepared to pay.
     
    Posted: Mar 6, 2018 By: GillespieBS Member since: Apr 11, 2008
    #15
  16. GillespieBS

    GillespieBS UKBF Regular Free Member

    309 43
    BTW - I wasn't aware that we were talking specifically about the franchise 'Cheap Accounting' I assumed that it was more about the topic of cheaper accounting!
     
    Posted: Mar 6, 2018 By: GillespieBS Member since: Apr 11, 2008
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  17. Ian J

    Ian J Factoring Specialist Full Member - Verified Business

    4,526 1,268
    Quite right. I was offered a package by my accountant that included unlimited advice at a higher price and turned it down as I didn't think I needed it and my accountant was happy that I would be getting the service that I need
     
    Posted: Mar 6, 2018 By: Ian J Member since: Nov 6, 2004
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  18. Maccademia

    Maccademia UKBF Newcomer Free Member

    6 0
    Ha ha! No I wasn't referring to any one company (or franchise) in particular and I purposely didn't mention one. But it was one of the ones that comes up when you google 'online accountants'. I instinctively avoid anything with the word 'cheap' attached!
     
    Posted: Mar 6, 2018 By: Maccademia Member since: Mar 6, 2018
    #18
  19. Glenn Martin

    Glenn Martin UKBF Regular Free Member

    125 34
    On first glance your fees seem high but your accountant seems to be engaging with you in an old school way. Where you send him your bag pf stuff he processes and sends it back. You need to be on cloud platform I have a lot of e commerce traders and feel Xero is best platform them as it integrates with so many others products. By contrast the other quote seems way too low and I suspect is very a very bare bones service i think you need to be somewhere in the middle say £1500 to £1600 and you should get a good job with the support you need. I think you will be dealt like a call centre style operation which you will maybe not like.

    for a setup like yours i would probably price it at £125 to £140 per month and that would be to do a decent job with everything included and no extras charged for.
     
    Posted: Mar 7, 2018 By: Glenn Martin Member since: Oct 1, 2015
    #19
  20. Mark Halsall

    Mark Halsall UKBF Newcomer Free Member

    12 2
    I pay my accountant a retainer which seems very high. But I can pick up the phone or call in at any time for any reason - even just advice. He is almost an unofficial non-exec Finance Director.

    I believe that a good working relationship with a decent accountant is very beneficial for a growing business. If the accountant is particularly good they will probably cover their fees with the extra profit their counsel helps you achieve.
     
    Posted: Mar 7, 2018 By: Mark Halsall Member since: Mar 6, 2018
    #20