Getting more value from your accountant’s fees

Getting more value from your accountant’s fees

One of the perennial questions I get asked by clients is how accountants work out their fees. From their perspective as a business owner, accountant’s pricing models can seem confusing – and that’s not good for their customer experience
To resolve this confusion, more and more accountants have moved over to fixed-fee pricing for compliance work as this makes it considerably easier for everyone to understand what the charges will be.
But what happens when things don’t run smoothly and additional costs get racked up? The best way to answer this is to explain how accountants calculate their fees.

Meeting the compliance requirements

Charging a fixed fee for basic compliance work – bookkeeping, expenses and day-to-day accounting – is based on certain expectations. The majority of accountants who have quoted a fixed fee will do so on the basis that the accounting records will be kept up to date – that the bank balances, sales and purchase ledgers will be fully reconciled, that the paperwork will be readily available and that the agreed timescales will be stuck to.
But sometimes accountants’ expectations and clients’ expectations may not coincide, and often this is down to a lack of communication between the two. Explaining what’s required, when it’s needed and who’s responsible for each task is an essential part of setting the right expectations – and making sure that you, the client, feel comfortable.

The value of the work being undertaken

Educating our small business clients is an important part of our role as accountants –you hire us for our financial expertise and guidance, after all.
But occasionally we do come across a business owner who is simply not interested in effective financial management. This usually stems from a lack of understanding of the value of the work being undertaken. Getting the basic compliance done effectively is the first step to offering even more proactive planning, forecasting and long-term business advice – and that’s the work where your accountant really adds considerable end value.
Fixed fees cover the compliance work, but it can sometimes be difficult for clients to understand the rates charged for one-off assignments; things like tax planning or getting access to finance etc.
Again, the crucial point is not to focus purely on the time spent, but on the value being added to your business. More and more accountants are pointing out the value that they have brought to the table with their expertise. So it’s less to do with the hours spent and more to do with the expertise that’s being delivered – expertise that’s been gathered over the years and which has value over and above the hourly charge.

Reduce your fees by being timely

It’s also important to understand the link between timely responses to your accountant and the impact on the time and fee you’re then charged.
If you respond to correspondence quickly and effectively, with the information your accountant needs, your accountant can carry out your work more effectively, more efficiently and – crucially – far more quickly. And that means your fees will be smaller if you’re working on ad-hoc work not covered by your fixed-fee package.

Spend more time getting to know your accountant

It’s worth spending some time with your accountant to understand how they deliver your accounting work. If you understand their processes, what information they need from you and when they need it, you’ll have a far more harmonious relationship with your business adviser.
At Caplan, we certainly value spending time with our clients and educating them on the value that our processes add to their business. Not only will this potentially minimise your fees, but it also means that the process being undertaken is far more smooth and hassle-free – and that’s a great end result for us and you!