Reply to: Payment Terms for Accountant

[Kent accountant]

An accountant's view

Firstly, your accountant should have issued you with an engagement letter and specific terms upon which he will do the work. If he didn't you should question his training, ethics and ability to do the work.

Secondly, it's not wise to leave everything until after the year end, there is certain tax planning which must be done before the end of the year (dividend levels, directors loans etc). So you really should meet your accountant a couple of months before the year end to do some tax planning.

After the year end - get your accounts done as soon as you want to, but don't leave it too late.


In terms of work I would estimate its broken down like this (obviously varies a bit):

Set up (engagement, authorised agent, PAYE scheme, etc) - 25%

Correspondence through the year and tax planning meeting with follow up - 25%

Completion of accounts, tax comp, personal tax return etc - 50%

[dagenheis]

And if you don't trust anyone to do their job properly then I think you need some counselling for your control problems.

I just did a reality check


I do trust some people so no counselling for me. BTW, counselling does not seem to be a valid business expense

On a serious note, I agree, don't want to mess around. Since it has been few monthly, i will be engaging closely over the next few months to establish a more informed opinion -- as far as there are no fundamental errors, we should be OK.

Cheers -- i had a laugh!

[SueEllen]

Will look into that (without hurting him that i don't fully trust him )

If you don't fully trust him to do your accounts properly then don't use him.

Seriously don't waste energy engaging with people like accountants and solicitors you don't fully trust to do their job properly.

And if you don't trust anyone to do their job properly then I think you need some counselling for your control problems.

[Wanderer]

Is it reasonable to pay quarterly for first two quarters and then pay the rest at the end when accounts and returns have been prepared and signed-off.

You can do whatever you want! At the end of the day the payment terms are part of the business deal between your company and the accountant.

How much are you paying? If it's less than £100/month then just shut up and pay, it's a (tax deductible) cost of doing business. Quite honestly, if you don't have an accountant who is on the ball and you misfile returns late or wrong then you are going to get stressed out, fined or pay far too much tax.

Once you've been trading for a few years and you know what you are doing, you can do the book keeping yourself (eg, using FreeAgent, Sage, ZedAccounts or SJD's spreadsheet) and just get an accountant to do the end of year stuff. For now, you want to keep your accountant closely engaged. A few basic mistakes can cost hundreds in fines or thousands in overpaid taxes that that you could have avoided.

[Jeremiah@RHJAccountants]

Will look into that (without hurting him that i don't fully trust him )


My year-end is in June and one of my returns is not due until feb 2013 but I wouldn't like to wait for that long.

I am sure if they are a good accountant they will have no problem in doing your accounts well before Feb 2013 as i assume you year end is June 2012 and you are a new company in the first year of trade?

I am sure it won't hirt them that much if you as the question

[dagenheis]

Will look into that (without hurting him that i don't fully trust him )


My year-end is in June and one of my returns is not due until feb 2013 but I wouldn't like to wait for that long.

[Jeremiah@RHJAccountants]

Making an error is not the main reason and the paying difficulties not at all. I would rather pay people early to ease my annual liabilities. It's just to make sure that the year-end accounts and returns are completed in a timely manner rather than waiting for the last week of submission. That's why I was thinking about the remaining half of the fee when the yearly accounts are signed off for submission.

May be this is also about the thinking that we need to give due attention to the client if there is some revenue attached to it. I don't know if you guys have such experiences. Don't want to keep calling/emailing. I may be wrong but this happens when you are dealing with someone for the first time.


On a related point, how long do you normally wait after the year-end so the accounts and returns be finalized. I understand there is a ample time (months) for companies house & HRMC. What's the best practice?

All accountants should give due care to clients.

The best practice is to get your books and records to you accountant normanlly 2 - 3 months after the year end if you can, they should be able to do them in a relativley short turn around no longer than 4 - 6 weeks as i am sure they will have lists of jobs to do on a date order basis.

So all in all the process shuld take 3 - 4 months leaving you with ample time to meet the filling deadlines for Compaines house and HMRC.

Also you should have an agreement/ engagement letter with your accountant which states what they will do for you. If you dont have this i would consider making a move.

[SueEllen]

Nope we don't have it in writing...

Ahh.

Ask him if you can have a contract.

Alternatively ask him via email so you get it in writing when he will do your company year accounts and when he wants all paperwork from you, so he can submit them at least 6 months early.

If he's scared of putting anything in writing or doesn't reply with the answers you want get another accountant.

[dagenheis]

Nope we don't have it in writing...

[SueEllen]

Making an error is not the main reason and the paying difficulties not at all. I would rather pay people early to ease my annual liabilities. It's just to make sure that the year-end accounts and returns are completed in a timely manner rather than waiting for the last week of submission. That's why I was thinking about the remaining half of the fee when the yearly accounts are signed off for submission.

Don't you have agreed terms of service with the accountant in writing where they state when they will do the yearly accounts i.e. 3 months after year end?

[dagenheis]

Making an error is not the main reason and the paying difficulties not at all. I would rather pay people early to ease my annual liabilities. It's just to make sure that the year-end accounts and returns are completed in a timely manner rather than waiting for the last week of submission. That's why I was thinking about the remaining half of the fee when the yearly accounts are signed off for submission.

May be this is also about the thinking that we need to give due attention to the client if there is some revenue attached to it. I don't know if you guys have such experiences. Don't want to keep calling/emailing. I may be wrong but this happens when you are dealing with someone for the first time.


On a related point, how long do you normally wait after the year-end so the accounts and returns be finalized. I understand there is a ample time (months) for companies house & HRMC. What's the best practice?

[Jeremiah@RHJAccountants]

Hi,
I am just wondering about the payment terms you folks have with a start-up accountant (one man show) rather than big accountancy service companies.

I know some may be paying on per month basis and some are paying quarterly.

Is it reasonable to pay quarterly for first two quarters and then pay the rest at the end when accounts and returns have been prepared and signed-off.

To be prudent, I am inclined to take this approach with someone new (with no past relationship, just a reference) rather than paying every quarter and have very little balance when the main work needs to be done.

To be fair, i think, the year end works (accounts, returns, personal returns) amounts to 2/3 of the work as compared to monthly payroll and FRS VAT returns.

Any thoughts?

Ta,

You should pay what is most comfortable for you, montnly, quarterly or at year end. Although if you do think your account may make a mistake why are you using him.

[JamJarST]

Hi,
I am just wondering about the payment terms you folks have with a start-up accountant (one man show) rather than big accountancy service companies.

I know some may be paying on per month basis and some are paying quarterly.

Is it reasonable to pay quarterly for first two quarters and then pay the rest at the end when accounts and returns have been prepared and signed-off.

To be prudent, I am inclined to take this approach with someone new (with no past relationship, just a reference) rather than paying every quarter and have very little balance when the main work needs to be done.

To be fair, i think, the year end works (accounts, returns, personal returns) amounts to 2/3 of the work as compared to monthly payroll and FRS VAT returns.

Any thoughts?

Ta,

Why is that prudent? Are you expecting him to make a mistake? If you are why are you using him?

[Sockpuppet]

I pay mine yearly. Then again I only see my accountant once a year.

[v8gaz]

If you are struggling to pay your accountant on the rate you're working for, perhaps you haven't quite got contracting?