When starting a business it’s important to keep your costs as low as possible. Money saved in one area of the business can be reinvested in another area to boost profits.
One area you can reduce your costs is your accounting fees. How you reduce your fees really depends on your situation. If you are a small business not seeking external investment then the level of advice you will need from your accountant will be minimal. A lot of the information you need can be sourced online.
In this article we will talk you through some of things you can do to reduce your accounting fees.
Be willing to communicate electronically
One of the top key phrases people use to find an accountant in Ireland is “accountants dublin”. (You can use google’s keyword planner to get search volumes). If you are willing to communication electronically you can work with accountants outside of Dublin who can charge far less as they have lower costs eg premises.
My accountant is based in Meath. His fees are very reasonable and anytime I need advice he’s always available via email or telephone. This works for me and my company. Because I’m using an accountant outside of Dublin where costs are cheaper my accountant is able to pass the benefits of lower costs to me in the form of lower fees.
Shop around & get recommendations
It’s important you shop around and get recommendations from trusted friends. When you get quotes from multiple accountants you will have a better idea who is charging too much. The problem with accounting is it is a tailored service to each person. Most accountants will not give a quote over the phone or by email. They will want to inspect your records and have a better understanding of how your business works.
Because of this, it can be a slow process to shop around for accounting services. By doing so you could save yourself money which you can then reinvest into other aspects of the business. When shopping around make sure you provide as much information as possible eg number of transactions, registered for VAT, number of employees etc.
The cheapest isn't always the cheapest
Linked to the previous section, make sure you get a recommended accountant. Legally, anyone can call themselves an accountant. You don’t need to be a member of a professional organisation or have completed any exams.
This point comes from a real life example. A client had hired an accountant to setup a shelf company. The accountant forgot to complete a return with the CRO. They lost their audit exemption. To have a set of accounts audited cost them €2,500 for a company which had no transactions.
Just because an accountant gives you the cheapest quote doesn’t mean they’ll be the cheapest accountant in the long run.
Learn how to keep records
One of the biggest factors influencing how much you pay in fees is the quality of your records. If it is easy for the accountant to understand your total revenue for example because all of the invoice are filled correctly you can expect lower fees. Or is it difficult for the accountant to understand you costs because you keep all your receipts in a shoe box.
You don’t need to be an expert but a simple understanding of keeping a paper file or scanning receipts into an app or excel basics can help a lot. Also, have a process in place, little and often is the key. It can be a nightmare at the end of 3 months trying to find backup for revenue or expenses.
Keep separate bank accounts
Keeping separate bank accounts is a good way to also keep proper records. Ensuring that transaction only relate to the business and none relate to personal use, it makes the accountant jobs easier.
The less time your accountant needs to spend trying to untangle your transactions the lower will be your fees.
Be willing to do some research & use free advice
Luckily we live in a age where there is all the information you need is available and easily searchable. Also, Ireland is very pro business compared to most other countries.
In Ireland it’s very easy to open a business bank account, setup a company and comply with legal filing obligations. Government institutions such as CRO & Revenue a very helpful (and free) if you call them about any questions or concerns you have.
Finally, there are plenty of articles online if you have any questions eg Sole Trader or a Limited company.The revenue website is very helpful along with the citizen’s information website. You can also get great advice from a number of the LEOs around the country for a small fee of roughly €20.
Your accountant's practice should mirror your business
The last piece of advice is to make sure your accountant’s practice is at a similar life stage to your business. For example, if you are small start-up don’t go to a big practice with 35 accountants based out of an office in Dublin 2. They’re fees will be far too expensive.
If you are a start-up and you need little advice your ideal accountant is
- Working from home
- Living outside of Dublin
- 3 years experience working in a small accountancy firm, 2 years working for themselves
- Has at least 3 clients they’ve worked with for at least 2-3 years who will give a recommendation
This person may have a terrible website but don’t let that deter you. Accountants aren’t very well known for their marketing prowess.