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Accounting fees for year end preparation of tax returns and financial statements can be ugly sometimes. The high fees added on top of a large tax liability makes the visit to the accountant's office a sour experience to say the least. The nagging question then scrapes your brain, how can I pay lower accounting fees?
Your accounting fees should be the total of the accountant's time multiplied by the hourly rate. This rate will be different from one accountant to another. Also, the accountant's length of experience and firm size will impact the hourly rate. So be careful that your accountant is the right fit.
Your accounting engagement agreement should fit your accounting needs.
It is important to learn the main activity area of the accounting firm. Accountants can offer services in tax preparation, non-reviews, reviews, audits and consulting services. The firms which spend the greater portion of time on reviews and audits will be more expensive as a higher level of expertise will be required on the part of the staff, plus more documentation has to be prepared to meet the guidelines of the accounting governing bodies. Review engagements can cost 2-4 times more in accounting fees.
A review engagement may not be required in your case, and if so, then you should change the appointment type to a non-review engagement. The main reason for a review engagement needed by a small corporation is due to financing reasons. However, quite often the lender is flexible on this matter and will amend your financing terms to a non-review engagement, especially if it will provide more working capital to you.
Negotiate your accounting fees with your accountant
Accounting fees are increased by the number of hours spent on your file. Consult with your accountant to find out where the time was spent. Maybe extra time was spent reconciling your bank account or correcting the allocation of postings, etc. Once you know the areas of excessive time if any, then you can prepare your records accordingly for next year and receive lower accounting fees. Confirm this expected reduction with your accountant.
Find out what other business owners are paying for accounting fees
Accounting firms seem to differ on the amount of accounting fees. Comparing your accounting bill with other businesses with similar accounting needs may help.
The completion of tax forms and providing tax consultation are two different things. The tax planning is billing on an hourly rate basis. You want to be careful that your accountant is capable of providing astute tax planning which ends up saving tax dollars. It might be wise to book an hour consultation with a well known tax consultant for some tax planning ideas and then hiring a lower cost accountant for tax preparation.
Your accounting fees should be the total of the accountant's time multiplied by the hourly rate. This rate will be different from one accountant to another. Also, the accountant's length of experience and firm size will impact the hourly rate. So be careful that your accountant is the right fit.
Your accounting engagement agreement should fit your accounting needs.
It is important to learn the main activity area of the accounting firm. Accountants can offer services in tax preparation, non-reviews, reviews, audits and consulting services. The firms which spend the greater portion of time on reviews and audits will be more expensive as a higher level of expertise will be required on the part of the staff, plus more documentation has to be prepared to meet the guidelines of the accounting governing bodies. Review engagements can cost 2-4 times more in accounting fees.
A review engagement may not be required in your case, and if so, then you should change the appointment type to a non-review engagement. The main reason for a review engagement needed by a small corporation is due to financing reasons. However, quite often the lender is flexible on this matter and will amend your financing terms to a non-review engagement, especially if it will provide more working capital to you.
Negotiate your accounting fees with your accountant
Accounting fees are increased by the number of hours spent on your file. Consult with your accountant to find out where the time was spent. Maybe extra time was spent reconciling your bank account or correcting the allocation of postings, etc. Once you know the areas of excessive time if any, then you can prepare your records accordingly for next year and receive lower accounting fees. Confirm this expected reduction with your accountant.
Find out what other business owners are paying for accounting fees
Accounting firms seem to differ on the amount of accounting fees. Comparing your accounting bill with other businesses with similar accounting needs may help.
The completion of tax forms and providing tax consultation are two different things. The tax planning is billing on an hourly rate basis. You want to be careful that your accountant is capable of providing astute tax planning which ends up saving tax dollars. It might be wise to book an hour consultation with a well known tax consultant for some tax planning ideas and then hiring a lower cost accountant for tax preparation.
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Want to find out more about accounting fees, then visit John Whiteley,CGA's site on how to choose the best tax software for your needs.
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