Overpriced accountant fees?

GemmaS
GemmaS Registered Posts: 178 ? ? ?
My other half was asking me about his accountant fees over the weekend. He has a full time job in London, but also is a part time sole trader with his own company providing IT support. His company has a turnover of about 30,000-40,000 per year. I'm currently studying AAT Level 3 so I don't feel I have the knowledge or experience to do his year end accounts for him yet; for the past 2 years I have just done all of the basic book-keeping for him up to trial balance ready to pass over to the accountant for it to be finalised. He is then charged £2,200 per year by them. I have looked in the forum for past posts about prices to charge for this sort of thing and for what the accountant actually does for him is this a reasonable fee? He can be a bit of a nightmare when it comes to the accounts, however since I have been doing the book-keeping he has become a lot better in regards to how he does things and the records he keeps.

Any advice would be fantastic here.

Thanks

Comments

  • groundy
    groundy Registered Posts: 495
    £2,200 for a sole trader. WOW. Are there any other complex factors on his return?

    I really need to start advertising down south more!
  • GemmaS
    GemmaS Registered Posts: 178 ? ? ?
    From your reaction I take it you think thats too much as well?!?!

    Well as I said he works full time, so his company is obviously his second income, he has a flat he rents out but apart from that it's not too complex. He has always been a nightmare about keeping records and insists on paying for things out of the wrong account and making things messy. He also tries to get away with a lot as far as putting things through the books is concerned. After some very noisy conversations since I have been doing the book-keeping he has got a lot better and things are a lot tidier.

    Maybe its time to look for a different accountant. At least until I have qualified, have more experience and feel more confident to complete them myself.
  • groundy
    groundy Registered Posts: 495
    I would say that is seriously overpriced even for Kent. Presuming books were in reasonable order we would charge approx £400 for sole trader accounts and TR and a further £150 for rental income plus VAT.
  • GemmaS
    GemmaS Registered Posts: 178 ? ? ?
    Thanks :) I thought so but wanted to ask the professionals before I tell him to re-negotiate price or change accountants :)
  • reader
    reader MAAT, AAT Licensed Accountant Posts: 1,037
    GemmaS wrote: »
    sole trader with his own company providing IT support. His company.............

    Is he operating as a sole trader or limited company?

    It sounds like he's operating through a limited company. The cost of preparing limited company accounts is much higher than preparing sole trader accounts. However £2,200 does sound like a bit on the high side when you're preparing the TB; I'm sure he could find another accountant to do all the work for less (although not as low as the figures previously mentioned).
  • GemmaS
    GemmaS Registered Posts: 178 ? ? ?
    No his is definatly a sole trader. Sorry if I confused things there!

    I will quite happily admit that he is terrible with his accounts. I get a headache just thinking about trying to sort it out! After attempting to reconcile last months bank statements tonight I have just given up and sat down with a glass of wine as I can't face having to figure out what he's done, again! In some ways I can understand why the fee has been so high. I will give him the fact that he is better than he was but there is a long way to go before I'll be happy with them and getting it to TB can be a nightmare.

    Maybe if I keep nagging him he'll get better???
  • groundy
    groundy Registered Posts: 495
    reader wrote: »
    (although not as low as the figures previously mentioned).

    Reader, why would you presume he could not get a quote at this rate?
  • coojee
    coojee Registered Posts: 794
    GemmaS wrote: »
    No his is definatly a sole trader. Sorry if I confused things there!

    I will quite happily admit that he is terrible with his accounts. I get a headache just thinking about trying to sort it out! After attempting to reconcile last months bank statements tonight I have just given up and sat down with a glass of wine as I can't face having to figure out what he's done, again! In some ways I can understand why the fee has been so high. I will give him the fact that he is better than he was but there is a long way to go before I'll be happy with them and getting it to TB can be a nightmare.

    Maybe if I keep nagging him he'll get better???

    But since you do the books to TB then the accountant doesn't have the mess to sort out, you've already done it so they shouldn't be charging for work that you've done.
  • Gem7321
    Gem7321 MAAT, AAT Licensed Accountant Posts: 1,438
    If books are prepared reliably up to trial balance stage then £2,200 is extortinate.
  • GemmaS
    GemmaS Registered Posts: 178 ? ? ?
    Thank you everyone for your replies!

    We'll be moving accountants me thinks ;)

    Just out of interest do you still think the price is too high if it wasn't done to TB but a plastic bag job with messy banking?
  • Kjmcculloch
    Kjmcculloch Registered Posts: 7 Regular contributor ⭐ ? ⭐
    In my opinion you've not provided enough information to say whether it's reasonable or not. How many transactions does he have per year, does he use a business bank account or a personal account?

    This is the kind of information that would help to formulate a price. what added value services does the accountant offer?

    Kris
  • reader
    reader MAAT, AAT Licensed Accountant Posts: 1,037
    groundy wrote: »
    Reader, why would you presume he could not get a quote at this rate?

    Sorry old chum- I completely misunderstood the original post; when I heard a figure of £2,200 for a job where an AAT has prepared the TB I was convinced it was for a limited company. I thought there's no way £2,200 could be for a part-time sole trader. Please ignore my previous posts.
  • GemmaS
    GemmaS Registered Posts: 178 ? ? ?
    In my opinion you've not provided enough information to say whether it's reasonable or not. How many transactions does he have per year, does he use a business bank account or a personal account?

    This is the kind of information that would help to formulate a price. what added value services does the accountant offer?

    Kris

    About 600-800 transaction in total a year. He doesn't deal with buying and selling stock so its only sales and his expenses... the majority of the transactions are him indulging his obsession with Costa Coffee ;) with a few travelling costs and general expenses etc etc
    What would you mean by value added services? I try and organise them as best I can into a TB and pass them over to the accountant. They do the end of year accounts and the tax returns and thats it really....

    He mainly uses his business account, however depending on his mood he may decide to use his personal account for business or his business account for personal usage. And when I mean mood i mean which ever card he pulls out first.... Grrrrrr! Nothing ever matches up. His paypal account is tied to his business account and he uses that for all sorts of things... be it for business or for himself. For me that makes things difficult as I'm not very experienced and still studying so at times I struggle with how to account for these things.... I've told him the next time he does uses the wrong card and makes things harder for me he will be sleeping in his car for a week :D lol
  • Monsoon
    Monsoon FMAAT, AAT Licensed Accountant Posts: 4,071 ? ? ?
    If I was doing the bookkeeping, charging by time, and the accounts were really, really messy, I can see the bill going into 4 figures.

    At my rates, though, £2200 would get you:

    Tax return
    Set of accounts
    75 hours of bookkeeping.

    That's the bookkeeping equivalent of 1.45 hours a week / 6.25 hours a month.

    But from a decent TB where all the hard work has been done for me? £3-400 +VAT.
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