Small Business Accountants: What are they worth?

Many moons ago we ran an article “Not all accountants are created equal“, a topic that is as relevant today as it was in 2006. And pricing of accountant services is at the centre of a little debate going on in the comments to this this article.  

But before you read on just answer a little question: What is it it that you want from your small business accountant? Is it just your tax statement for HMRC or is it it more. This in my mind is the core of this ongoing debate about accounting fees.

One of my readers, John Dickson, left the following comment:

“I think its really hard to pick an accountant. Even refferals have to be questioned because my view is that you’d probably need to be an accountant in order to judge whether an accountant’s fee is justifiable – and to judge how good their work really is. Fees do seem vary substantially. I recently got a quote through for Final Accounts and Self Assessment. I think prices are being driven down due to competition and the current climate and the fact that accountants in practice are losing those small and medium sized business clients who are folding up.”

Jason Holden, who wrote the original post, disagreed with John:

“I totally disagree with you John, you do not have to be an accountant to know if the fee is justifiable, everyone will know when the price is too high or too low.

Price may be driven down by some; however, we refuse to compromise on fees as they are set a realistic middle of the road, not the cheapest nor the most expensive rate.

Once you reduce your fee you reduce the quality of what you do which in turn attracts a lower level of client, but then I guess it depends on who you want for clients?

Recommendation still remains the best way to go, if someone has an accountant they are happy with, and if you see they have a decent business and the accountant advises them on a regular basis then that is a good start!

Also, although online quote sites have their uses they are usually aimed at the lower end and with a view to price (that is low price) rather than added value services that aid success.”

Who is right, John or Jason? IMO, both have a point:

  1. If you are looking for a set piece of work, i.e. final accounts, the price comparison website is for you.
  2. If you are looking for someone to advice your business and help you to make better decisions, then you are looking at different parameters.

If you are looking to get advice, then the old mantra – You Get What You Pay For – still holds true. But does that mean the higher the fees the better the advice?

Today accountants can work from anywhere, using online technology, they can be on the Outer Hebrides and do your accounting/bookkeeping, and give you advice, be involved in your business, almost like a virtual CFO.

As a small business owner going to one of the big four accounting firms, IMO, would be a mistake. You are having to pay high fees and you will always be a “small” number, a point that John made in response to Jason. However, with his objection he validated Jason’s point too, IMO. When you go to city offices and the nice lady (or gentleman) asks you if you want coffee or tea, you know you will have to pay for the nice office, nice chair you sit in an the nice lady’s (or gentleman’s) service. I think anyone in business can make that connection. This all has nothing to do with how good or bad the service is.

Having said all that, I still believe when you go to small business acountants, like the ACCA’s Business Advisors, you get what you pay for, either cheap and cheerful or more expensive and more personal & more advice. After all, accountants can provide a basic service or spend time to help you plan your business – the choice is yours. Just remember the product they sell is their knowledge & experience, in other words their time.

In my job I see businesses fail everyday, because they made very basic mistakes, mostly of a financial nature:

  • Did not have a business goal, tried to do too much, no business focus.
  • Did not do a cash-flow plan and up-dated it regularly, so they did not see the cash problem coming.
  • Never thought about if they made enough money with their services or products.

I could go on and on, the point being – an accountant looking at your business as an advisor will see these things, especially one focused on self-employed or small and home businesses.

I believe both Jason & John have it right in their own way, question is what do you want from your small business accountant, form filling or help and advice? I know what I would be looking for!! – ST.

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