What should I be paying an accountant?

[salu]

Anyone have any idea on what’s reasonable and what’s ridiculous?

Currently my structure is the following and shows revenue and also accountant fees (keep in mind this excludes bookkeeping and BAS lodgements as they are done internally, this is purely tax planning, advice and tax lodging)

Business A Pty Ltd - 1.5M revenue (accountant fee - $20,000)

Business B Pty Ltd - 150k revenue (accountant fee - $7,000)

X Pty Ltd as trustee for X Trust - 100k income (accountant fee $8,500)

Y Pty Ltd as trustee for Y Trust - 80k income (accountant fee $4,000)

Almost $40,000 in accountant fees for the year.

Is this normal? This is the second year I’ve been in business and this seems ridiculous……

They have told me there hourly rate is $400.00

Thanks and appreciate any feedback

 

[lindseym1013]

@salu Revenue isn’t a good gauge, depends more on complexity. But that seems very high

My family trust has a about 100k revenue across property and stock and we pay about $2k per year to our accountant.

 

[salu]

@lindseym1013 So the net earnings for the business A is about 300k - 400k. For business B it’s about 90k.

X & Y are the entity’s that I personally invoice the business for my services/commissions. Those are set up as discretionary trusts etc.

Yes $2,000 for each entity is sort of what I was thinking is reasonable!

 

[lindseym1013]

@salu If all your trusts are doing is taking the income
And then distributing, you’re getting ripper off.

 

[salu]

@lindseym1013 Yep 100%!

 

[kmack7]

@salu There are many factors to consider based on your business structure and how you operate.

If you think is high, have a chat with other accounting firm, explain to them about your business structure and what services you expect... they will give you a quote.

You can still get a $2 accountant, but expect a $2 service from them.

 

[toi11]

@kmack7 .... I doubt he's getting $400hr service from the $400hr one....

 

[kmack7]

@toi11 And hopefully not from PWC

 

[toi11]

@kmack7 I said $400ph not $4,000ph.

Jk.... or am I?

 

[kmack7]

@toi11 Better Call Saul

 

[believeinmiracles]

@salu It depends on the level of complexity and what your data is like going in. If you pay a competent bookkeeper and everything reconciles at year end you're getting ripped off. If your data is all over the place and you're not using Xero, QB or MYOB then it may be justified.

The $400 quoted will be the partners rate but most likely the work is done by graduates ($110) or accountants ($140) with a review by a manger ($250) and maybe a meeting with the partner at year end.

You'll also have to look at the tax savings you're getting, if it's over $40k then you're getting your money's worth.

 

[salu]

@believeinmiracles Yeah I have an offshore bookkeeper that I pay about $240 a month to reconcile everything in xero and do payroll once a fortnight. The accountant has set me up with MYOB so all documents etc are in there.

Yes I requested to use some one junior in the firm as I’m dealing directly with the director of the firm. They came as a recommendation as my mentor owns a bunch of franchises and they do his books for him.

Look I saved about 12k in tax and that’s it personally

 

[thedarkhalf]

@salu Accountant here and this seems extremely high for annual compliance, especially if the bookkeeping is to a high standard.

Does any of this relate to one off additional advice?

 

[salu]

@thedarkhalf So pretty the other one off services are like team meeting to discuss tax position and moving forward into the next Finacial year, or if I have a question about something eg. Transferring car into trust etc then I get charged say anywhere from 250-400 for that conversation.

 

[thedarkhalf]

@salu You'd be best off moving to a fixed fee accountant who can answer those questions as a part of a fixed monthly or annual fee.

 

[motsog]

@salu Business A Pty Ltd - 400k revenue

X Pty Ltd as trustee for X Trust - 200k income

2 x Individual Tax returns incl shares/divs/cap gains/gearing IPs 4

4 x BAS via myob login + Asic forms and lodgements - they do all this for $6K

 

[shalom7]

@salu Seems kinda high.

Happy for you to PM me.

I'm an ex-accountant so can tell you pricing is based on many factors. What business your in. Etc etc

 

[salu]

@shalom7 Yeah 100% I’ll PM you