Minimising your Accounting Costs
How you can most efficiently work with your Accountant
How do accountants charge?
All Accountants charge by time. The longer it takes to work on your file the dearer it’s going to be. Some businesses sell hamburgers, real estate agents get paid commissions, and Accountants Sell Time. The more presentable you submit your accounts, the quicker we get it done, and the more cost effective it is. We only have 7.5 hours per day to sell and we would not be in business if we gave our product away. After taking into account unchargeable time, administration duties, practice management issues as well as professional development, our available 7.5 hour day is reduced to, on average, 5 hours for team members and only 2 hours for partners in which to perform direct chargeable hours for clients.
Can you give me a quote for the job?
Just like it’s impossible to quote a building job over the phone without looking at the plans, or value jewellery over the phone, it’s not possible to know how long any accounting work might take.
Two sets of books for the same business can take twice as long for one set as for the other, depending on how the books are presented.
Please work with us to try to minimise the time, hence the cost. Ask us for a more efficient way of presenting your books. The more you do the less it will cost. Make sure everything is there. Should we pick up and put down your work waiting for missing information the more it will cost and the longer it will take.
Why may my bill differ from the prior year?
Basically four reasons
(1) As you would certainly be aware, there is continual change in taxation laws in Australia and complex reporting requirements by the Australian Taxation Office and other Government bodies.
(2) There may have been more work this year. Example: could be an extra lease, turnover / activity has gone up, extra things you required us to do. Capital gains tax calculation, sale/purchase of business or business assets. Purchase a new investment property.
(3) Increase in our charge out rates as our labour costs are going up every year.
(4) Due to missing information. If info is missing we will leave the job, pick up a new job and will not come back until the current job is complete. The more often a job is put down and picked up the more time is added to the job.
It is in our interest to complete the job quickly so we can get onto completing the next job. We earn the same amount of money and have a lot more happy clients.
You’re my accountant, so why are others preparing my tax return?
It’s more economical to you. It’s silly to use a surgeon to stitch a minor cut when a G.P can do it at a much lower cost. The surgeon cannot do it any better than a G.P. It’s overkill to have a surgeon do it.
Don’t forget our team do this daily and when something is done daily, one becomes very quick and efficient.
All of our professional team have university degrees or are in the process of attaining one, and some are CPAs and Chartered Accountants. They undergo over 60 hours per annum of CPE (Continuous Professional Education).
When will the partners look at my tax return?
The appropriate team members process all the accounts and produce a draft set of accounts. The work then goes to the Partner who then discusses the tax planning. It’s this tax planning session that could save you thousands in tax. The team member finalises the accounts according to the Partner’s instructions.
Sometimes the client is called in to discuss various problems or look at options. This process is similar to the surgeon and the nurse or the mid-wife and the Obstetrician. These processes are designed to minimise the costs to the client / patient.
I asked you to run your eye over this document and you send me a bill?
Don’t forget our business is to sell time. If the task takes less than 5 minutes (like a phone call) then it’s done free. More than 5 minutes is charged (including phone calls). We only have 7.5 hours per day to sell. If we give it away free, we would not be in business and be able to offer our services.
Whenever we request an answer to a question from our tax lawyers, they send us a bill, once again based on the time spent (at $500 / hour).
It’s not unusual to receive a bill for $125 for a 15 minute phone conversation. This is standard practice. We understand that if we want their time we have to pay for it.
A majority of the available time of partners in working on client files is spent on the telephone and on emails providing clients with advice.
If we were not to keep a record of this, nor take it into account when billing you for our services, we would certainly be doing ourselves a disservice and would be unprofitable which would ultimately result in an overall reduced professional service to you. Due to the time constraints on most business people these days, a majority of our advice to clients is now undertaken via the telephone or email.
Why has it taken so long?
A) In the peak period it will take longer.
B) Missing information will delay the job.
In the PEAK PERIOD between August and March and the two week period each quarter prior to due date for lodgement of BAS and IAS the turnaround time may stretch out as everyone wants their work done in this period. Every Accountant in Australia is in the same boat. So please be patient in this period.
In the OFF-PEAK PERIOD turnaround time drops back considerably.
Just like there are peak and off peak periods for holiday accommodation, every accountant is in the same boat. So be prepared for delay in the peak period. Remember how hard it is to get accommodation during school holidays.
Paying accounts on time
Please help us provide you a good service by paying your accounts on time. Without payment we cannot provide the resources to give you prompt service. Some clients take a long time to pay but expect us to drop everything and attend to their needs immediately. It must be a two way street.
You have to get the best service possible and we have to be given the opportunity to provide it within the constraints available to us.
Summary: 13 steps to help you minimise your accounting costs
13 steps to help you minimise accounting costs
1. Efficient computerisation – make sure that you understand the computer packages you buy.
2. Provide all the information in the first instance and, in plenty of time, summarise and reconcile as much as possible.
3. Explain any unusual events at the initial meeting.
4. Ask yourself the question “can I attend to this without contacting MT?”, i.e. sometimes you may contact us to email copies of documents such as tax returns and financial statements which you may already have in your possession.
5. Discuss with your client manager, areas that can be improved or work that you can do to present the job better.
6. Use our team members for the minor things and use the partners only for the important things.
7. Provide missing information quickly.
8. Do most of the running around yourself e.g. calling banks and/or solicitors.
9. Contact us via email to ask for answers to questions.
10. Become informed about financial matters. There are a wide range of books, magazines, seminars and tutorial programs available. We would be happy to assist you in this regard.
11. Plan ahead so that we both know what is happening and can prepare for the event.
12. Improve your record-keeping. Don’t pay for us to sort through messy and/or incomplete records. Ask us to provide you with a checklist so you provide all the information required. We can also advise on a record-keeping system to suit.