Easy Ways to Save on Accounting Fees

In these tough economic times, one must save on costs wherever one can. An area not to be overlooked is accounting fees. A little bit of planning and implementation of some of the following points will help to achieve this.

Negotiate with your accountant. It amazes me to see how many people give their accountant the go ahead without knowing what the services will cost. It is recommended that you get an idea of the cost and (even better) get an engagement letter from the accountant setting out the fee structure.

Choose your accounting firm well. A big accounting and audit firm will cost a lot more than a smaller firm. You will often find that a smaller firm will offer a better service as you may not need the specialized knowledge that a bigger firm can advise.  Just one word of caution; cheap may end up costing you more, so always check qualifications and references.

Give your documents to the accountant in an organized manner. This is, possibly, the most important point. The accountant will spend less time on your work, meaning less cost for you.

Utilize your own staff. Can your staff do some of the tasks done by your accountant? Your staff should do tasks such as, capturing of supplier invoices, filing and organizing of documents. Your accountant need not do this.

Keep business and private transactions separate. This decreases the volume of transactions immediately. Smaller business owners, in particular, are guilty of mixing personal and business transactions and should, as a start, open separate bank accounts for the two.

Ask your accountant how you should summarize your data. Some smaller business owners decide to do their own books and do so without speaking to their accountant. At the end of the year they bring their figures to the accountant, only to discover that it is not in the best format for their accountant to digest. This leads to extra work and extra cost.

Give your accountant enough time. Accountants love clients who bring documents to them well in advance. This allows them to do your work in periods when they are less busy and you can often negotiate a better price during these periods. Some accountants also charge higher fees if they receive documents close to a deadline.

Choose the correct business entity. There are different types of business entities in different parts of the world and every country has its own requirements. The bottom line is that certain types of entities require more accounting work than others; some even require an audit. Speak to your local accountant to find out all the pros and cons of the different entity types as there are more considerations than just accounting fees.

Use a bookkeeper. Bookkeepers are cheaper than accountants and the more work you can get them to do, the less accounting fees you will pay to your accountant. Accountants often recommend the services of bookkeepers they trust. Using one of these bookkeepers can be to your advantage, as your accountants will often spend less time going through the bookkeeper’s work compared to a bookkeeper they have never worked with before.

Use accounting software. This is a viable option, as long as the person working on the system has some accounting knowledge, otherwise it can lead to even more work for your accountant.

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