Annual Fee for Accountancy Services

Annual Fee for Accountancy Services

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How much can a company expect to pay for its Year End Accounts and Tax management services? Turnover is £400,000. Are fees normally a percentage of turnover? How are fees calculated?
Teresa Ash

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By IanRiley
17th Jul 2007 14:44

Turnover not relevant
Normally I would fix a fee based on the approx number of transactions that took place in a year.
In a business with a £400k turnover, this could range from a dozen transaction to tens of thousands. Obviously the business with tens of thousands of transactions would be charged massively more than the business with a dozen transactions.

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By User deleted
18th Jul 2007 13:34

Quality of accounting records
Above all else I consider the quality of accounting records to be critical to the fee level to be charged.

In the worst extreme the records of a client can be so bad that they virtually have to be re-written in a comprehensible form - a very costly excercise.

At the other extreme there are clients who can run (say) Sage Line 50 properly and do all the necessary reconciliations - most crucially including the bank account and ensuring that the following common errors are avoided :-
<> Differentiation between capital and revenue
<> Making sure that Purchase Ledger balances are accurate - no rubbishy wrong way balances or old balances that were settled but not posted to the ledger as such
<> Ditto. Sales Ledger balances
<> Full audit trail retained

The difference between the two extremes can be extremely large !
This is why, from day one any new clients I see have their accounting systems reviewed to see if there's anyway to reduce the work involved for year end accounts preparation and therefore a minimisation of fee level.

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By Essex FCCA
17th Jul 2007 14:02

How fees are calculated
Teresa,

Fees are normally calculated by reference to how much time is spent on the job multiplied by the charge out rate for each member of staff. Turnover would not normally be a criteria for deciding upon fees.

All my clients are charged on a Fixed Fee basis maening that client's are aware of the cost prior to the work being carried out.

Depending on where you are based, then I am sure that there would be a number of Accounting Web users that would be happy to provide you with a quote.

Paul

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