“How much do you charge” is the question we get asked the most, and a lot of the time this is the deciding factor in people choosing an accountant to work with. Are you looking for the cheapest option? Are you looking for the best value and you’re happy to pay more if you’re getting more? Are you working within a budget you have available? Or do you just really want to work with a particular firm and price isn’t a factor?
Either way, price differs from one accountant to the next. There are thousands of accountants around. Within a square couple of miles of our office there are another 10 accountancy firms. Plus, these days your accountant doesn’t need to be local. We’ve got clients from all over the place… Australia, Scotland, London…
With so many accountants on offer and prices varying so much, we’re going to try and give you a rough guide based on what we charge and try and fit it in with where you’re at with your business. We’re not the cheapest and we’re not the most expensive, so these prices should give you a good idea of what to expect.
Sole trader with sales less than £50k a year
You’re a new business trading as a sole trader, with no staff and expect sales of less than £50,000 a year. You want to automate your book-keeping as much as possible. You also need someone to contact whenever you need help.
If this is you, for annual accounts, yearly tax return, use of book-keeping software and unlimited support, your fee should be around £60 per month. This works out at £2 a day and makes sure you’re on the right side of HMRC and don’t have pile of receipts lying round. Plus, someone is on the end of the phone to answer your worries and give you valuable advice.
Limited company with sales between £50k and £85k a year
You’ve got a limited company that is growing, but not VAT registered yet. You have one other director or a member of staff helping you. You’re currently preparing invoices on Word and emailing them to customers. Or you have a till in your shop and keep spreadsheets or written notes for your sales. You need some advice on tax planning and what you can take from the company.
Expect fees of around £120 per month if this sounds like you, which cover the essentials like:
- Filing annual accounts, corporation tax return and confirmation statement with HMRC and Companies House.
- Processing your monthly/weekly payroll with HMRC for your director’s salary and the other member of staff.
- Filing your personal tax return.
You’ll have the use of book-keeping software to help with your invoicing or till sales, which keeps the data feeding in to us on a live basis, so we can give you advice every quarter on how much you can take from the company and how much you should be saving for your tax bill.
£120 a month is the equivalent of paying a part-time member of staff 3 ½ hours a week at minimum wage (£8.21).
Limited company with sales of around £250k a year
You’re an established business and have 5 staff, a fellow director and the business is VAT registered. Some of your staff are enrolled into the company pension scheme. You need monthly updates and management reports to plan for what tax is due and see how the business is performing.
Around £360 plus VAT per month would be a reasonable amount to cover your needs here. This includes accounts, tax/VAT returns filed with HMRC and Companies House, along with the essential use of book-keeping software.
You’ll also have support dealing with staff payroll issues like sick pay/holiday pay/maternity pay/contracts and auto enrolment duties for your company pension scheme.
Some business owners evaluate the health of their business by what’s currently in the bank, so having a quarterly report pack showing your sales, expenses, profits and other valuable insights will give you a picture of what’s really happening in the business and help you weed out any problems or highlight what you’re doing well so you can build on it.
£360 a month is less than 1.5% of your sales, so for what you’ll be getting in return, this should be looked at as a great investment.
Limited company with sales of around £1m a year
With this level of turnover and 10 weekly paid staff, you’ll need regular support. You want to keep expanding the business and need to plan ahead. You need to know what tax bills to expect so cash flow doesn’t become an issue and you may need funding to help growth.
A monthly fee of around £600 plus VAT will get you all the necessary filings with HMRC and Companies House, use of book-keeping software and weekly payroll processing with wage slips sent direct to employees. On top of this you’ll have a cashflow forecast which is based on future projected sales and expenses, to give you a picture of what may lie ahead in future years. This will be used in connection with your monthly management reports and reviewed with us in quarterly meetings or phone calls. With all this on hand you’ll be ready to apply for funding or seek investment as soon as you need it.
£600 a month is a similar cost to employing an apprentice, so to have expert advice and live insights into your business for the same price is great value for your money.
Limited company with sales of around £5m a year
You need an accounts department and full-time support. Managing 20 staff can bring all sorts of problems, so you need to make sure you’re on top of everything and operating within the law. Chasing customers and clients for payment has become time consuming and is having a negative effect on cash flow. You also need to monitor how the company is performing from week to week and keep track of key factors within the business.
Some businesses employ full time bookkeepers, credit control staff and in-house accountants to run their accounts department. With the technology on hand this isn’t necessary anymore. As long as you have a member of staff or your website system invoicing your customers, we can pretty much do the rest. For £1,100 plus VAT per month, you’ll have weekly book-keeping, we’ll chase your customers for payment and take on the role of financial director with monthly meetings an updates.
A part-time in-house bookkeeper will cost you around £14k a year. An in-house accountant £30k? Using an experienced firm of accountants may provide a wider range of knowledge and be cheaper.
Overall, to be a successful business, you need support. The level of support depends on how much you want to grow and how easy you want your life to be. £1,100 a month may seem a lot, but £13,200 a year, is the equivalent of paying a member of staff minimum wage for 30 hours a week. Having an expert as part of your team can be invaluable.
Summary
If you can fit yourself roughly into or between one of these cases, it should give you a good guide on what fees to expect from an accountant and what you’ll be getting for your money.
As a business owner you’ve got to consider what you need and how much you’re willing to pay for it.
If you want things done well and fast, it won’t come cheap.
Fast and cheap won’t be good quality.
Good and cheap won’t be fast.
Generally, you get what you pay for in life, so invest well and you should get the rewards.
But equally you need to research what you’ll be investing in and have some trust that you’ll get what you’re paying for. Look at accountants’ social media, websites and have a chat or meeting with them to make sure they’re a good fit. Don’t just look for the cheapest option as it may not work out well.
We’ve got other blogs showing how we work out fees and the factors around this if you need to find out more details. And we’re always on the end of a phone or email if you need to ask any question or get a quote!
