An accountant helps meet your accounting obligations with Revenue and the Companies Registration Office (CRO) by preparing financial statements and filing tax returns. An accounting firm may also offer bookkeeping and payroll services, depending on your needs.
Businesses usually outsource their accountancy duties because they need help with their annual statutory accounting obligations. Not all entrepreneurs have time to take care of their own accounts, so they outsource to a professional.
How much does an accountant charge?
If you have been on the market for an online accountant for a while, you’ll find that most accounting firms don’t provide a standard set price.
This is because factors like time, company size, and the services required usually determine their fees.
Generally, accountants charge based on a percentage of your annual turnover.
How to choose the right accountant
Clarity and transparency are critical to any successful business and accountant relationship – especially regarding pricing.
Some accountancy firms offer a fixed fee for services, but you must ask for total clarity on what is within the terms of usage. Ensure you’re covered for any questions or advice you may need throughout the year.
As a business owner, it’s completely normal to have questions about tax registration, what expenses you can claim, or how to keep a sound bookkeeping system. You’ll want to ensure your accountant can support you from the beginning and give you the correct advice.
Accounting fees for Sole Traders and Limited Companies
If you’re searching for an accountant, you’ll find it tricky to find any fees online.
This is because every business may have a different cost depending on the complexity of your business and turnover. With this in mind, you don’t usually see an accountancy firm with a “one price fits all”.
Accounting requirements for Sole Traders
- Annual tax return (Form 11)
- VAT registration
- VAT returns to Revenue
- PAYE registration
- Payroll processing
Accounting requirements for Limited Companies
- Corporation Tax registration
- Annual Corporation Tax Return to Revenue
- VAT/VAT MOSS/VIES/EORI application
- VAT returns to Revenue
- PAYE registration
- Payroll processing
- Annual Financial statements, including profit and loss accounts and balance sheet
- Annual Directors Return
What information is required for a quote?
Turnover refers to the total sales generated by a company in one year. It is sometimes called revenue or income. Not to be confused with profit – profit is the money a company has minus expenses.
Accountancy firms need to know your expected annual turnover because it usually indicates the amount of work an accountant must do.
Percentage of cash transactions
Cash transactions refer to how much of your business deals with physical cash – i.e. notes and coins.
Cash affects the price you pay because there are a lot of individual receipts and invoices for cash transactions that your accountant needs to go through. Online transactions cut down an accountant’s work as each transaction goes directly into your bank account, and there are digital records of these transactions.
Online accountancy software
Using small business online accounting software to manage invoices, receipts, and bank statements makes work much easier for your accountant. The software collects, stores, and sorts all the data and displays them into great reports and dashboards.
You can then give your accountant access to this software, and they don’t need to go through each individual record. Your accountant needs access to your financial records to prepare your financial statements and tax returns.
Do you require other services?
As mentioned, another reason accountancy firms don’t offer their prices online is that every business is different.
If you need other accountancy services, this will change your quotation. Further services like payroll or online bookkeeping services – are additional solutions accountants can offer.
Estimated number of sales and purchase invoices for VAT returns
Generally, VAT returns are filed every two months, and they outline the VAT you have charged to clients and the VAT you have paid for.
Number of employees for processing payroll
Suppose you hire employees or you’re a director taking a salary. In that case, you need to operate a payroll system and report all payroll filings to Revenue on or before the employee/director is paid. Some companies specialise in managing payroll, or you can do it yourself, or you can outsource payroll services to your accountant.
Number of directors for filing Directors Returns (Limited Companies only)
Directors need to file Directors’ Tax Returns in October each year. It is a statement that outlines the amount of personal income a director has had. This can include salary or dividends from their company.
Even if a director has no income, they must file nil (zero) Director Return to Revenue.
Our clients outsource this to us because we help them avoid missing the deadline, and we take care of the paperwork.
Other charges you pay throughout the year
As mentioned, many accountancy practices charge a fixed price. So why are they asking you for more money throughout the year?
Here are the top reasons why your accountant may be asking you for more money on top of their fixed price:
Paying taxes to Revenue
In Ireland, all taxes are filed on a self-assessment basis. This means that your accountant completes the necessary calculations to determine how much tax you must pay in one year to Revenue.
You pay your accountant to calculate this tax bill for you. It is their job to ensure you are not paying too much tax, availing of the correct tax credits and reliefs, and all your expenses are recorded correctly.
Paying fines to Revenue or the Companies Registration Office (CRO)
Another reason why an accountant may be asking you for extra money throughout the year is that you’ve missed an important deadline. This is another fee that is paid directly to the source.
For example, Limited Companies are required to file Annual Returns to the CRO each year. Failure to file it on time and your company will be fined €100 for the day the Annual Return was missed and €3 per day until it is filed, up to a maximum of €1,200.
Paying for face-to-face meetings
If you want to have a sit-down meeting with your accountant, check if it is included in your fixed price or if it incurs additional costs.
At Accountant Online, all our meetings are conducted by telephone or video chat. This means that you don’t need to travel to Ireland to meet your accountant, and you can choose the location of your meeting. We use Zoom or Skype to conduct our video conferences, and we’re always happy to talk via these platforms.
The work outlined in the beginning exceeds the work to be done
There can be different reasons why the fixed price set out at the beginning does not match the work being carried out. For example, if the company had many more cash transactions than anticipated. This means the accountant needs to spend more time preparing the accounts because she needs to go through each receipt.
Another reason could be that the level of turnover exceeds the amount estimated initially. Your accountant should set specific parameters around the fixed price, and if you exceed these parameters, you may get charged extra. Your accountant should let you know if you have exceeded their fair usage policy before any further work is done.
Tom is a Fellow Chartered Certified Accountant (FCCA) and Chartered Tax Advisor (CTA) and is Accounting Team Manager at Accountant Online. Areas of expertise include Accounting, Compliance, Taxation relating to small business and company directors.