Questions

Our accountant is raising their fees based on our revenue figures. They have a broad pricing model based on annual revenue, that doesn't take into consideration any other factor (e.g. number of transactions, complexity..etc). Our revenue figures increased during the year and hence they are revising the contract so we'd pay three times as much as what we paid at the beginning of the year. We are looking for quotations from other accounting firms, but we're faced with the question: what's a good price? Since accountants charge monthly here in Ireland, and we barely interact monthly (we do our own book keeping), it's hard for us to evaluate their worth based on the amount of work done since most of it will be done at the end of the year.

when you receive 2 offers, what is your selection criteria? the lowest price or the one the can add more value to your company?

First, you need to know the scope you are asking for:
1. to meet statutory requirement only?
2. to have better internal control in place?
3. to have good financial data for decision making?

From the way you decided, you probably looking at 1 (or a little bit of 3) of the above.

You need to make sure the accountant can help you to meet the statutory requirements and not just looking for the lowest price. This is quite challenging as most accountants had listed what they will do as a total package but you are not able to determine whether they can prepare quality accounting services or not.

I had many clients come to me on accounts prepare 3-5 years back where they are under investigation by the company registrar authority and Inland revenue authority. Most of the time, these accounts are poorly prepared although the books are balanced and met the statutory requirements on the surface level. I need to investigate the financial numbers, reinstate the financial positions and explain to the relevant Government authorities to help my clients to avoid further fine, punishment, or even jail. Therefore cheap, not equal to save money, it may cause more in the future.

Recently, I have a client ask me to prepare accounts for them, as the sales are low and the transactions are not a lot, after including the preparation to meet the respective authorities' requirement, I make a relatively low price for the job. My intention is to help my client at a very affordable price while ensuring good quality accounting practices and financial statements prepared in place at the same time. My client, however, asks me to reduce the price so as to be in par to others where the price will never able to prepare the minimum accounting service quality. In the end, I decided to give up this opportunity. I am here to solve the problem and not to make money and put a time bomb at the same time!

Therefore please give more thoughts when:
1. the price is too low,
2. any unrealistic promises

Some guides may help you to determine quality:
1. 30%-40% time on statutory reporting requirements
2. 30%-40% time on good accounting practices
3. 30%-40% time on bookkeeping

(thus you revenue increase may have no impact to the bookkeeping but may trigger the statutory reporting requirements (may happen in some cases), your accountant increasing his price may due to a) want to make more money, or b) increase in workload (if any).

hope the above help you


Answered 4 months ago

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