How much does a good accountant cost? Watch our video to learn more.
Well the simple answer is less than a bad one. A good accountant will help you avoid fines or help you boost your profits and will help you proactively reduce your tax bill.
In reality, of course, it just depends. I think for accountancy fees, it’s like buying a car. You buy a second-hand car for £1,000 pounds or spend £100,000 pounds on a sports car. Fundamentally, they do the same thing. It’s just how they do it.
Sometimes the difficulty as a business owner is that few accountants actually show their prices on the websites and that’s because they do vary so much, even within the same firm.
For example, our fees are based on the size of your business, the structure of your business.
So, are you a sole trader or a limited company? The records you keep, are you bringing us in a big pile of paper that we need to process. Have you already done the bookkeeping? And then the level of service you want.
So, as an example, do you want VAT returns prepared for you? Do you want a payroll run for you, or personal tax done? Or perhaps you want management accounts and meetings throughout the year. And of course, the fee can come down to your budget.
What should I expect to pay?
Well it does depend on what you want and need. I have a client who came to me and his wife actually pays £200 pounds a year to an accountant, that’s because she has a very small business, it’s almost a hobby, really. It doesn’t make much profit and there’s no tax to pay.
So, she adds up all her own figures, gives them to the accountant and all they do is take those figures and put them into a tax return. That £200 pounds gets her everything she wants and needs.
However, he uses me and pays over 10 times as much as that because he has quite a sizable business and he wants advice throughout the year.
Someone cleverer than me though, actually came with a great rule of thumb. He told me that you should look to pay about 1.5% of your turnover, over for your finance functions, to include your accountant and perhaps a bookkeeper.
As you grow, that 1.5% might include an internal finance person as well, because it reflects the fact you’re going to need more support.
So, if your sales for the year are say £100,000 pounds, you’re looking at probably £1,500 pounds in accountancy fees. If your sales go up to a million pounds, you pay about £15,000 pounds in accountancy fees or for your internal finance people.
I do think that’s a really good rule of thumb that gives you an idea. Of course, it does depend on the exact service you need, but hopefully that helps you get an idea of what you’ll pay.
So that gives you an idea of what you should pay a good accountant. If you want to know anymore, just get in touch.