Whilst the costs of operating a small business in Australia continue to climb, it always makes sense to look at ways to reduce costs.
One area that is worth looking into is your compliance and accounting costs and how you can reduce the chances of receiving a whopping bill from your accountant.
The fee structure of all tax agents is to charge by the hour with rates scaling upwards from junior to senior staff. Because of this, many people are put off by their perception of high fees and potentially forgo greater value from accountant’s services in the future.
So, is lowering your accountant’s bill just a dream or can small business owners take measures to control costs?
Use these tips to keep your accounting fees to a minimum:
- Make the most of the first meeting
When searching for an accountant, look for professionals who offer the first meeting for free. Make use of this time by asking lots of questions and what additional resources they offer that could you’re your business. The more information you can obtain in the initial meeting, the fewer questions you will have down the track, saving time on additional phone calls in the future.
- Invest in a good software package
The most efficient way to keep good records is to invest in a user-friendly software package which suits the needs of your business. There are numerous low-cost options to perform all the necessary functions. When selecting a software package, consider who will be using it, what functions are important and the security of data. Software with online access will save you time on data entry by feeding bank statements straight into the software, as well as allowing your accountant to access your records online.
- Provide detailed information upfront
Having well-organised records will minimise the time your accountant spends reviewing and understanding them. When you record transactions, provide as much detail as possible by utilising the “memo” or “description” fields. Prior to submitting documents to your accountant, ask them for a customised list of information they require. The less time they spend looking for answers, the lower your bills will be at the end of the job. Future question time can also be reduced by informing your accountant upfront about unusual activities, such as a purchase of a new motor vehicle, new loans, grants and other significant changes in the business.
- Reply promptly to your accountant’s queries
No matter how much information you provide, a good accountant will have questions after they have reviewed your records. Most inefficiencies arise when clients take a long time to respond to queries. The cost of putting down a job and then having to revisit it is passed on to the client, increasing the initial expectation of fees.
- Maintain regular communication
Despite the charge-by-the-hour nature of accounting, one phone call today can avoid numerous phone calls in the future to work out a particular issue. Transparent and frequent communication will reduce your risk of additional dollars on your bill because of misunderstandings or lack of information.
Some people may regard a visit to their accountant much like a visit to their dentist: painful and expensive. But it doesn’t have to be. Armed with well-prepared records, a good accountant will work with you to save you tax and improve your business for a reasonable fee.
If you have additional tips or ideas on how you have minimised the accounting fees for your small business share them with the small business community by leaving a comment below.