7 Ways To Reduce Accounting Fees You Pay
You want to reduce your business costs. We don’t blame you. Every business wants to keep their costs lower compared to their income, that’s how a profit is made. It’s a good thing to monitor your business expenses including accounting fees and try reducing them if possible. As long as the quality of what you’re getting in return for a cheaper price isn’t compromised.
Never look at the numbers in isolation because they aren’t really very meaningful. You have to put them in context. £200 per month for accounting fees charged by one accountant doesn’t necessarily mean the same accounting service that you would get from another accountant charging exactly the same. £200 also has a different meaning for a small business compared to a big one.
So before you jump into changing your accountant to reduce your accounting fees, make sure you look at a bigger picture. There are also other things you can do to reduce their fees which we discuss below.
Please bear in mind that the fees may not drop down straight away in all cases. However, if your business is growing, implementing the below solutions now, will help you keep your accountancy costs relatively low instead of significantly increasing them in proportion to your business growth.
7 ideas that will reduce your business’s accounting fees
Have your business records organised
If you deliver your business records to your accountant in a complete mess, they will spend significantly more time providing accountancy services to you. It’s simply because first they will have to organise them before they’ll be able to put things together for you, like your tax return for example. In this case there’s no doubt your accounting fees will stay high or even increase if the volume of your documents increases. If you don’t want your accounting fees to hit the roof at some point, keep your business records organised.
Outsource admin tasks to a virtual assistant
Compiling and sorting your business records can be time consuming. We totally agree with this. Our bookkeepers from Oxford know this very well from experience too. If you don’t have time to stay on top of your paperwork, consider outsourcing your admin to a virtual assistant.
You may think, great it’s an extra costs, but not necessarily. Accountants’ fees are usually much higher than virtual assistants’ fees, so you will be saving money if you let a virtual assistant do all the sorting. You will also be saving the money if a virtual assistant’s fees are lower than your fees, because while you’re sorting your business records, you’re probably not earning any money.
A little note here, we don’t recommend your virtual assistant doing the bookkeeping. There’s much more to bookkeeping than just typing the numbers from your invoices. You need to know accounting rules and concepts to do correct bookkeeping. It is especially very true for limited companies or VAT-registered businesses. But a virtual assistant can definitely compile your business records for your accountant or a bookkeeper, keep them organised in one place or chase anything missing. Good virtual assistants with great organisational skills can be a great asset in your business.
Implementing accounting software can significantly reduce your accounting fees or keep them quite low while you’re growing. The reason for this is that accounting software can automate many things for your accountant. This includes day-to-day bookkeeping but also a preparation of your self-assessment tax return, VAT returns, corporation tax or limited company’s annual accounts.
Having accounting software gives your accountant another possibility of using document processing software, like AutoEntry. Software like this automates bookkeeping, reduces admin time but also helps minimise errors that can be easily done by a human.
If you’re trying desperately to stay away from going digital, you are limiting your accountant and this increases their accounting fees.
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Use bank feeds
There’s probably nothing more time-consuming than manual bank reconciliations. If you implement accounting software, you will be able to have live bank feeds. Bank feeds mean your bank transactions are automatically fetched by your accounting software.
Believe us when we say this is one of the best automations ever and it can really reduce your accountant’s or bookkeeper’s time. With other possibilities like for example bank rules, it can be a real time-saver.
Communicate with your accountant on a regular basis. We’re not claiming you have to reply within a few minutes, but don’t leave things unanswered for months. Why being responsive is so important for reducing your accounting fees? Because if you reply to your accountant after months, it is very likely they won’t remember everything and they will have to go through things again to make sure you are all on the same page and they give you correct answers.
Switch to regular accounting support
Having a one-off accounting service, usually once a year is okay if you’re a small business with a small volume of transactions. However, it doesn’t work very well with a bit bigger businesses, and we don’t even mean really big. There are a few things that add to the time and the accounting fees if you don’t have regular accounting support.
One of them is problems with the bank transactions, unmonitored bank feeds and hours that have to be spent to sort them. If a service was regular, these things would be spotted much quicker and sorted very quickly as well. There are also other things that you could be doing wrong simply because you’re just not aware, but they may also require your accountant to spend more time to correct them.
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