How much do Accountants Charge?

When I visit a website one key piece of information I’m looking for is price.  I want to know if the service or product I’m researching is affordable to me and I don’t really want to have to call, make an appointment or sit through a demo just to find out what it’s going to cost me.  I’m assuming you’re the same. 

Why then do hardly any accountants display their prices? Are we hiding?

Maybe a little.  We often hide behind the fact that prices range depending on size and complexity of your business, factors such as structure, employee numbers, turnover etc…

To be fair, this does make it very difficult to state clearly if you want X it will cost you Y.

Detailing fees when they can vary so much can also be misleading but let’s see if we can explain how our fee structure works and provide at least an indication of pricing.

More and more the accounting industry is adopting fixed fees.  Our fees are charged monthly and based on an agreed fixed price.   

Why fixed fees and not hourly rates?

In my opinion there are many reasons, firstly if you pay your accountant by the hour you then have to pay each time you contact them.  Each call, each letter, every contact results in a charge for their time and adds up on account until you make payment.

This is far from ideal as it lacks clarity.  You will not know how much your yearned accounts will cost until they are completed.  You might have an idea but there will be uncertainty in your mind and uncertainty over cost is never a good thing.

Fixed Fee Benefits?

Let’s now look at fixed fees which are becoming the norm.

The benefits of fixed fees are pretty clear as they address most of the problems highlighted when previously discussing hourly fees.

• No additional charge to speak to your accountant.
• Often fixed monthly payment – no surprises and helps cash flow.

Following your initial discovery call you’ll be invited to book a second call to design your service solution.  It’s during this call we discuss the basics of what you need and the additional options that might be of value to you.  You’ll select from a menu of services and together we’ll build a solution to fit your needs and your budget. 

Let’s start at the bottom and look at fees for a basic compliance package for a consultant running a small, limited company with a turnover of £150k. 

What are compliance services?

Compliance services are services offered to meet your legal filing requirements with HMRC and Companies House.  The very basics you must have such as:

• Annual Accounts
• Corporation Tax Return
• Annual Confirmation Statement
• VAT Return
• Director Payroll
• Personal Tax Return

As a guide our average fee for such a package would be £225+VAT p/m.

£225+VAT may, or may not, feel expensive to you but let’s look closer at what’s included but not listed, things like service, peace of mind and time….your time. 

So what’s included that perhaps isn’t that obvious?

Each of the listed services include an element of hidden value which takes time and effort to provide. 

Annual Accounts – in addition to drafting and submitting your annual accounts we offer a pre-yearned tax planning meeting to discuss options for reducing taxation.  We also have a sign-off meeting with our clients to take them through their accounts ensuring you understand what you are signing. 

Corporation Tax – we apply all available allowances to reduce your company tax burden.  We also act as your authorised agents with HMRC so that should there be a need to call them it’s our time spent on hold and dealing with their query not yours.

VAT Return – often relatively simple task but what if you have a question.  Perhaps a new client or service to a different country.  Our fee includes VAT support so you have the answers you need without additional charge.  Again we also deal with HMRC should something go wrong. 

Director Payroll & Personal Tax Return also includes annual calculation of the optimal salary level for your circumstances and personal tax advice during the year at no extra cost. 

Unlimited Email and Telephone Support is included in every plan we offer and provided to every client free of charge.  That’s unlimited access to a team of chartered and certified accountants with over 20 years of experience advising small businesses from start-up to exit.  And this wasn’t even on the list!

If £225p/m looked expensive o you before hopefully its less so now.

How much of your time does £225 buy, probably not a lot.   Our services attract clients whose time is of a premium, who don’t want anything to go wrong,  and if it does, they want someone else to sort it out for them while they get on with running their business. 

How much would you be happy to pay to have someone else deal with HMRC rather than spend 45min on hold yourself?  

We’ve looked at fees for a basic compliance package for a micro company but how about a Virtual Finance Office solution.

What’s a Virtual Finance Office?

Virtual Finance Office (VFO) solutions are becoming increasingly popular as software evolves to make co-operation in real-time between client and accountant almost seamless. 

A VFO service includes the compliance services previously discussed but is aimed and saving more of your time, maximising profits and reducing your risk.  It is our favoured solution and the one we see the best client outcomes. 

Think of a VFO solution like having your very own accounts department.  Your accounts department will be led by a chartered accountant who will be supported by a qualified bookkeeper and experienced payroll professional.  A team that would cost over £100k per year combined, but that is available to you as and when needed at a fraction of that cost. 

Your virtual team can absorb as much of your accounting function as needed but crucially it can also provide qualified financial oversight and accurate reporting. 

Bookkeeping

• Bank reconciliation.
• Purchase invoice/receipt processing.
• Sales invoicing
• Credit control.
• Supplier and Staff payments

Reporting

• Profit and Loss – including financial commentary.
• Tax Liability – tracked in real time.
• Cash flow – monitoring source and application of funds.

Advisory

• Monthly/Quarterly/Bi-annual – financial review meetings

Who suits a VFO solution?

The service is aimed at business owners actively trying to grow their business, who understand doing their bookkeeping themselves will hold them back and don’t want to hire in a bookkeeper they then have to manage.    

The VFO solution is designed to support growing business with an experienced and professional accounts department through to the point at which they can justify the cost of hiring an internal team.   

You grow your client base, grow your sales and delivery teams, build out your services and products while we support you by removing the bookkeeping and providing you with clear visibility of the company’s financial health as you grow.

When you are ready to hire your internal finance team we can seamlessly transfer the accounting function back to you as its completely cloud based. 

We have provided VFO solutions to clients from start-up through to £2m plus turnovers. 

When a client reaches £2m in turnover we normally recommend bringing most of the day-to-day finance function in house even if it is likely to be more expensive to do so.   At this point we usually step back to offer compliance and advisory services which are partner led to support your next level of growth. 

How much does a VFO solution cost?

A VFO solution will start at a cost of £325+VAT p/m and increase depending on volume of transactions and complexity. 

Because the solution scales as your business grows the entry level fee is affordable even for one person firms and start-ups. 

Although the bare bones version is just £100 p/m more than the basic compliance solution, I don’t want to mislead.  Fees for a VFO solution average £495 with some exceeding £1000 per month. 

Still a fraction of the £100k plus team of qualified professionals that will be supporting your growth with their experience and expertise.   

Yes absolutely, some online firms can offer fees for basic compliance from as little as £95+VAT p/m.  If price is the most important factor in your decision, then just entering the search term “contractor accountants” into Google will bring up a list of firms currently competing on price. 

They are obviously volume providers, which we are not.  We have around 100 clients at anytime and don’t intend to grow our client numbers beyond the point that we can offer the service level we work tirelessly to maintain.