# Cost of Accountant



## PDCAT (24 Apr 2012)

Hi Folks

My wife is a Sole Trader (going through tough times at the moment). She is covering all her bills but not making any wages for herself. It has been like this on and off now for 12 months. Basically she's working for no wages at the moment.
I perform her bookeeping duties for her (Cash Book, Cheque Journal, Purchases Invoice Book, Vat & Prsi etc...)
At the end of the year her accountant performs the end of year books. Not sure how much work is involved in this.

I am currently looking at all her bills to see if we can reduce them. She is currently paying her accountant 1,200 euro per year. Turnover on her business is about 95,000 euro per year (used to be alot higher).

Just wondering, does 1,200 sound excessive from other's experience?

Meeting with her accountant in a couple of month's and i might ask him about a reduction, or else might look at other accoutants prices? Just wasn't sure if what she's paying now is too high or is fairly standard.


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## Bronte (25 Apr 2012)

Can't tell if it's excessive unless we know the amount of work.  Have you tried getting prices from other accountants to give you an idea of what it should be?


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## mandelbrot (25 Apr 2012)

Well if she was paying 1,200 p.a. when there was a higher volume of business / transactions / work, then one would expect that the fee would fall as the level of activity falls... not necessarily in direct proportion, but definitely some reduction. Unless for some reason (such as quality of record-keeping) the amount of work required by the accountant hasn't fallen as the level of business has dropped.


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## J.Ryan (25 Apr 2012)

PDCAT said:


> Hi Folks
> 
> My wife is a Sole Trader (going through tough times at the moment). She is covering all her bills but not making any wages for herself. It has been like this on and off now for 12 months. Basically she's working for no wages at the moment.
> I perform her bookeeping duties for her (Cash Book, Cheque Journal, Purchases Invoice Book, Vat & Prsi etc...)
> ...


 

It also depends on the quality of your work,  as if you can do anything to make life easier (and the fee lower) for him, when you prepare the records.

Have reconciliations prepared


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## bazermc (25 Apr 2012)

Does the price all include the preparation and filing of her personal tax return?

The accountant should give you a fee schedule stating how many hours to do specifc work and the hourly charge?


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## 44brendan (25 Apr 2012)

Does she necessarily need an accountant? If the business is unincorporated and transactions are fairly straightforward, can you do the tax work and returns yourself? It's not a major problem to familiarise yourself with the tax system and Revenue have plenty of guidance on completing returns.


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## Jonny (25 Apr 2012)

On the face of it 1200 sounds excessive considering that you prepare the Vat & PRSI yourself & also maintain the books of original entry  Is the fee of 1200 inclusive of VAT ?


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## Brendan Burgess (25 Apr 2012)

What did last year's bill say? 

Accounts preparation. 
Financial advice. 
Submission of tax returns 

€1,200 for a qualified accountant to do all this would not be excessive (but I am a qualified accountant). In fact, I would say he probably has discounted the bill to reflect your current trading position.

As the business is smaller, you might consider getting an unqualifed accountant to do it. In general, qualified accountants should be better, but I have known some useless qualified accountants and some good unqualified ones. 

Call the accountant now and tell him that you are trying to cut costs. Ask him what can you do to reduce his time input and fee.

Brendan


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## Tomorrow (25 Apr 2012)

It is very hard to say if it is excessive or not without knowing the quality of the records etc.

However I would say that Accoutants fees have reduced alot over the past couple of years - well ours have anyway! 

I cant think of a single sole trader we have that has a fee of that level but it probably depends on which part of the country you are in.

I am sure if you speak to your accountant, he will do something for you.


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## simplyjoe (26 Apr 2012)

44brendan said:


> Does she necessarily need an accountant? If the business is unincorporated and transactions are fairly straightforward, can you do the tax work and returns yourself? It's not a major problem to familiarise yourself with the tax system and Revenue have plenty of guidance on completing returns.


 
IMO bad advice. There are over 5,000 sections of the taxes Acts. The Revenue will help but I have found their advice to be inconsistent and not pro-active. They have no interest in you paying the correct amount of tax. Indeed they are so understaffed and under stress I am surprised they can function at all. I have had clients that decided to do their own returns. Invariably they come back having encountered major problems. In all most all cases where I have reviewed non-professionals work I have found major problems. Brendans advice to use an unqualified accountant is also IMO wrong advice. If things go wrong you have no where to go with an unqualified accountant no professional indemnity insurance, no institute to complain to. He is right that there are poor qualified accountants out there but there are a whole lot less problems with qualified accountants than unqualified ones. Seek referrals. In the current climate you will get a qualified accountant to do this work for a lot less than the €1,200.


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## 44brendan (26 Apr 2012)

I am an accounant simplyjoe. As is BB. basic taxation returns are not that complex and many small businesses should be in a position to complete their own tax returns. Yes, in some cases an accountant can add value, but it is not fair to infer that those who complete their own returns are prone to making errors. Revenue help lines and website are good information sources & ROL is easy enough to complete. I have helped a number of sole traders in using ROL and they are not suffering any penalties as a result of this.
Yes, accountants can add value to clients, but they are not always necessary to the smaller business, for basic tax work.


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## bazermc (26 Apr 2012)

simplyjoe said:


> IMO bad advice. There are over 5,000 sections of the taxes Acts.


 
There is 1104 not 5000!!!!!!


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## simplyjoe (26 Apr 2012)

OK - also sub sections! As regards people preparing their own returns my experience differs and that is what I have said in my post. IMO tax returns can appear very complex to even the most intelligent of people. For some people 'figures' are just not their thing. IMO an accountant telling someone to do their own returns is like a doctor telling people they should look up their illnesses on the internet.


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## 44brendan (26 Apr 2012)

Without wishing to get into any contention on the issue, would you not accept that such advise is applicabel for some, and not for others. I.e. if the ailment is minor there may be no need to attend a doctor.
Advice above is on the basis that tax returns for many sole traders are fairly simple and can be completed without the involvement of an accountant. Where tax or legislation is more complex then the services of an accountant would be warranted.


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## Bronte (27 Apr 2012)

Simplyjoe I think you're way off there in your opinion that non accountants are incapable of doing their own tax returns.  Most small business owners are too busy to have time to do their own accounts.


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## simplyjoe (27 Apr 2012)

Likewise I dont want to get into contention on this. I believe I have answered the OPs question - you can get cheaper and from a qffd accountant. 

I am an accountant for 32 years (Qfd 23) and in all that time including recently I have rarely, if ever, seen a tax return completed correctly by a non professional. This is my experience and I am letting the OP aware of my experience. I stick by my opinion that anyone with s/e income should get an accountant/tax consultant (IT qfd) to prepare their tax return.


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## Purple (27 Apr 2012)

simplyjoe said:


> Likewise I dont want to get into contention on this. I believe I have answered the OPs question - you can get cheaper and from a qffd accountant.
> 
> I am an accountant for 32 years (Qfd 23) and in all that time including recently I have rarely, if ever, seen a tax return completed correctly by a non professional. This is my experience and I am letting the OP aware of my experience. I stick by my opinion that anyone with s/e income should get an accountant/tax consultant (IT qfd) to prepare their tax return.



I've seen a few completed incorrectly by qualified accountants (my wife has been on the receiving end of a few). I've seen Revenue staff at an audits conclude that the accountant who compiled and filed the return was incompetent and so charged no penalties for under declaration. Qualification and competence are not the same thing. That applies to all professions and skilled jobs. 

PDCAT, if you are “doing the books” then you should know enough to assess the competence of an accountant. Talk to the one you have and see how you and they can reduce the costs (as advised above). If they won’t play ball shop around.


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## mandelbrot (27 Apr 2012)

Purple said:


> I've seen a few completed incorrectly by qualified accountants (my wife has been on the receiving end of a few). I've seen Revenue staff at an audits conclude that the accountant who compiled and filed the return was incompetent and so charged no penalties for under declaration. Qualification and competence are not the same thing. That applies to all professions and skilled jobs.
> 
> PDCAT, if you are “doing the books” then you should know enough to assess the competence of an accountant. Talk to the one you have and see how you and they can reduce the costs (as advised above). If they won’t play ball shop around.


 
+1

I'm a qualified accountant, and Purple has hit the nail on the head there - passing their finals doesn't automatically make someone competent, despite the fact that this actually the purpose of a professional qualification. A couple of the most incompetent people I've worked with were qualified accountants, and some of the sharpest accountants I've met are people who kept failing the final exams and just couldn't be bothered getting them. The world is full of successful people who never formally qualified in their chosen field.

Being a good commercially aware accountant / business advisor doesn't necessarily mean you are also up to speed on the tax side of things. So you can have someone who is a good "accountant" but a poor tax advisor - such as a guy I know of who mismanaged a share buyback for a retiring company director and cost his clients €0.5m... he'd helped them build up a solid business over 30 years, giving good commercial advice all the way along, but made a basic tax error at the end that had dire consequences.


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## 44brendan (27 Apr 2012)

> Being a good commercially aware accountant / business advisor doesn't necessarily mean you are also up to speed on the tax side of things. So you can have someone who is a good "accountant" but a poor tax advisor - such as a guy I know of who mismanaged a share buyback for a retiring company director and cost his clients €0.5m... he'd helped them build up a solid business over 30 years, giving good commercial advice all the way along, but made a basic tax error at the end that had dire consequences.


Some good points there Mandelbrot. Accountants (similar to other professionals), differ in respect of their professional competence & expertise. taxation is an extremely complex area and there are occasions where a reference to a tax specialist is warranted. Likewise there are many clients whose business model is simple and they should have no problem in dealing with their own tax affairs.


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## Jonny (27 Apr 2012)

Bottom line here is -its down to the competence of the particlular individual in the accountancy/taxation field  Referrals,references & recommendations are what it comes down to or just simply having a chat with fellow buisness people about their experiences with a particular accountant  Again if you think the fee is excessive have a chat with him/her.  Nothing to lose...


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## PDCAT (27 Apr 2012)

Thanks Guys for all the replies.

Just to provide some info as there were questions asked:

The 1,200 figure is inclusive of VAT. My wife is in business for 8 years. Accountant's fees have only increased once (that was after the first year). 
The amount of work required by the accountant hasn't fallen as the level of business has dropped. The quality of the books seems IMO to be very good and comprehensive.

My tasks involve performing all basic bookeeping duties (Cash Book, Cheque Journal, Purchases Invoice book) i save these on disk and give them to the accountant along with all other information he requires at the end of the year.

The accountant then performs the end of year accounts (A 5/6 page document (Gross Profit - Net Profit - Balance Sheet) and Tax return due.
Accountant also checks PRSI/VAT for end of year (p60 for one employee).

Not sure how long it would take him to perform this 5/6 page document. He has two other young girls whom work for him doing some of the work i believe. i have always thought (maybe incorrectly) that this work was not worth the figure being paid. But again, i'm no accountant..... i think this was due to the fact that i only deal/meet him maybe once/twice per year as i understand exactly what he requires.

I think i might first of all ask him for a price reduction. Also i think i might ring other accountants and see can i get some quote's from them.


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## 44brendan (27 Apr 2012)

Good strategy!


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## Purple (27 Apr 2012)

PDCAT, if her accountant is doing a good job then don't move for a small saving; it could well cost her far more in the long run.


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## flattea2 (14 May 2012)

PDCAT said:


> Thanks Guys for all the replies.
> 
> Just to provide some info as there were questions asked:
> 
> ...


 
Fee sounds reasonable from the info you've given especially if its inc VAT.

Ask if there is any way of reducing the fee by way of extra work on your own behalf.

Can be messy changing accountants (especially if you are already happy with the work) - would any possible reduction in fee be worth it?

Have you looked for other quotes? I think it would be hard to beat that.

I think your options are 
1) do the returns yourself or
2) see what else you can do for the accountant to reduce his fee.


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## Hebs (14 May 2012)

I used the online system at www.paylesstax.ie for the first time this year (have paid a similar amount of money as your wife for an accountant for the last 6 years). 

Found it really easy to use and also called their helpline to check on a few things I wasn't sure of. 

Cost is only €99 (exc vat). As a sole trader I'd definitely recommend it. 
There's also an option to pay a bit more to have someone double check everything for you.


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## mandelbrot (14 May 2012)

Hebs said:


> I used the online system at www.paylesstax.ie for the first time this year (have paid a similar amount of money as your wife for an accountant for the last 6 years).
> 
> Found it really easy to use and also called their helpline to check on a few things I wasn't sure of.
> 
> ...


 
I really can't understand why people use this service - you are paying them for the privilege of doing everything yourself. You have no real certainty that you've done everything right, and even if you pay the extra money to get someone to check it for you, there's no real incentive for them to add any value at that stage, as you're already paying them anyway...


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## Hebs (15 May 2012)

mandelbrot said:


> I really can't understand why people use this service - you are paying them for the privilege of doing everything yourself. You have no real certainty that you've done everything right, and even if you pay the extra money to get someone to check it for you, there's no real incentive for them to add any value at that stage, as you're already paying them anyway...


 
The help is included in the €99. You pay extra to have a tax consultant check  everything and submit it to the revenue on your behalf. 

They have various calculators included in the forms to help you work out if you're paying the right level of pension, allowances for personal use etc etc. I tried to fill in my tax return myself but didn't know what to put in which box - the paylesstax system guides you through it. 

Perfect for the self employed person with simple accounts and no money to pay an accountant with!


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## mandelbrot (15 May 2012)

Hebs said:


> The help is included in the €99. You pay extra to have a tax consultant check everything and submit it to the revenue on your behalf.


 
Just to be clear on this: they are using the term "trained tax consultant" but they are not using the term "registered tax consultant" which is the recognised tax qualification in Ireland. You could call around to my house for a few hours tomorrow evening and come away as a "trained tax consultant"... 

I must stress I don't know it for a fact, but I would be very surprised if the "trained tax consultant" who looks over your tax return if you pay the extra money is actually professionally qualified. Hence the service is cheaper than actually getting a qualified accountant to do your tax return. Next time you're on the phone to them maybe ask them what their qualifications are; I wouldn't be shy about it if it was me... you're depending on them actually knowing their stuff in order for you to be paying the right amount of tax.

I suppose what I'm saying really is that some people aren't cut out for prepping their own accounts etc. AT ALL, and even paylesstax's service won't benefit them hugely - they just need to give their shoebox of receipts etc to a bookkeeper / accountant every couple of months, and leave them at it.

Alternatively, if you are a small sole trader who is up to the task of doing your own bookkeeping, then you may well be able to do the whole thing yourself. Bookkeeping / accounts / tax can be a laborious task for most people, and the benefit of getting someone else to do it is that it frees up your time to do what you are good at - i.e. there's an opportunity cost for the time you spend doing your books that you could have been generating business and earning money. So IMHO the subset of people who actually gain an economic benefit from a service like paylesstax, where you have to do all the hard work yourself (albeit less laboriously than without the service), is probably quite small.


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