Great service, reliability and professionalism are all things every business should expect from a good accountant.
But, what about costs? For all small company owners, this is a crucial factor when it comes to choosing an accountant.
What factors influence your accountancy costs?
Here are some of the key factors which will affect how much you pay your accountant:
- The size of your company (turnover).
- What services does the accountant carry out?
- The complexity of your accounts.
- If you have employees or not.
- If the company is VAT registered or not.
- If the accountant does your bookkeeping.
Accountancy costs – different methods of charging clients
The fixed-fee model has become more popular over the past few years, with increased competition and streamlining of the industry as a result of online accounting.
Monthly, Quarterly or Annual cost models are common, particularly in the contractor accounting industry.
Any work carried out beyond the pre-agreed service will usually be charged at an hourly, or one-off rate.
Historically, many accountancy firms would charge on a time basis – perhaps with a minimum annual fee.
This may still be a way of working that you prefer – particuarly if your accounting needs cannot be easily streamlined into a fixed-fee model.
How much do limited company accountants cost?
More and more accountancy firms provide a fixed-fee service – which covers the majority of tasks most small limited companies require, including as a minimum:
- Preparation of annual accounts
- Submitting your Corporation Tax return
- VAT accounting (if applicable)
- Processing payroll (usually for 1 or 2 people)
- Dealing with HMRC and Companies House
- Provision of some kind of online accounting software
For these core services, you can expect to pay anything from around £70 to £180 per month. Here are some examples, using firms we work with at LCH:
|Aardvark Accounting||£76||Full service, including FreeAgent software, payroll, IR35 advice.|
|Clever Accounts||£74.50||Complete service, unlimited support. Package for larger companies available for £104.50.|
|SG Accounting||£109||Full package, contractor specialists. Half price offer currently available.|
|SJD Accounting||£90||This is the 'Light' package. Essential package @£120 includes VAT accounting.|
|Vantage Accounting||£79||Price based on up to £85k turnover. Small company specialists.Half price offer available.|
Aside from additional costs you can reasonably expect to pay – due to increased requirements, extra staff members, etc. – you may pay extra for things like this:
- Any initial start-up costs, including company formation
- References for mortgages / rental / other loans
- Submitting your Confirmation Statement (£13)
- Preparation of directors’ self-assessment forms (can’t be charged to the business)
- Bookkeeping (beyond that provided automatically via online software)
- Providing a registered office address and/or service address for directors
Can you do your own accounts?
Yes, you’re under no legal obligation to appoint an accountant. There are also some excellent online accounting software tools out there to make your life easier.
However, for a number of reasons, we would highly recommend you use an accountant unless you have the time and required skills.
Your valuable time is probably better spent building up your business.
Cost is an important factor when choosing an accounting, but other factors are equally important.
Good customer service is imperitive – and unfortunately, this is not something you can always gauge until you have become a client.
This is why a recommendation from a trusted colleage is worth its weight in gold.
Try our guide to choosing the best limited company accountant for more ideas.