Is cheap accountancy good value?

[Maccademia]

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!

 

[GraemeL]

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.

 

[Ian J]

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.

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

 

[Maccademia]

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.

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

 

[GillespieBS]

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.

 

[Maccademia]

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.

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....

 

[GillespieBS]

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.

 

[Mr D]

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.

Amazon can be done monthly too, date range report on payment screen.

 

[Mr D]

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!

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.

 

[STDFR33]

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.

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).

 

[Maccademia]

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

 

[STDFR33]

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

Worth giving Kevin a shout at Platform Accounting. Has quite a few e-commerce businesses, and specialises in Clearbooks, an online bookkeeping package.

 

[Maccademia]

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 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?

 

[STDFR33]

I realise you don't have all the details but I feel I don't fall into the 'no frills' category

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.

 

[GillespieBS]

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.

 

[GillespieBS]

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!

 

[Ian J]

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.

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

 

[Maccademia]

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!

 

[Glenn Martin]

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.

 

[Mark Halsall]

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.

 

[Ian J]

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.

I think that in many cases that's an old wives tale promulgated by accountants themselves as most small businesses don't need that much advice on an ongoing basis as long as they keep an eye on the budget and ask the odd financial question on here

 

[GoingOnline]

I use an online accountant to do my Ltd. stuff. Price is about the same you quoted. I end up doing a lot of paperwork anyway (putting everything invoices and expenses on their system, reconciling bank accounts, etc...) and they don't hold my hand or are proactive in terms of telling me how to increase profits. If you have a standard vanilla business, works fine. If you have a complex business and personal financial situation I think an accountant that has a more personal touch would be better. Just my 2c

 

[Daugela]

I believe that the old saying holds “you get what you pay for”.

 

[TexasLarry]

Finding a good accountant is just as difficult as finding a good hair stylist, mechanic, docotor, etc.

I would avoid larger firms like the plague.

Find an individual accountant that is "hungry" and wants to work for your business.

The only way to find such a person is by calling around and interviewing candidates.

Sounds like your current accountant likes to "nickel and dime" you, which is a red flag.

Wish I had an easier formula, but if you search long enough, you'll find a gem, I'm sure.

HTH!

 

[Phildswtres]

I think its like any other trade, you need to find the right person more than anything else. I've worked in small firms and one of the largest and there are good and bad (awful) in both. As the above answer states, shop around and speak to them, then go with who feels right for you. I wouldn't put too much emphasis on the price.

 

[kevin.doran]

Worth giving Kevin a shout at Platform Accounting. Has quite a few e-commerce businesses, and specialises in Clearbooks, an online bookkeeping package.

Much appreciated.

On the face of it £2650pa does sound rather expensive yet on the flipside £834 is quite cheap.

For me it's all down to value for money - if the £2650 firm offer a x10 better service than the £834 I know where i'd be going....

 

[KAC]

Welcome back @kevin.doran