How You Can Save 33% on Small Business Accounting Fees
Running a small business comes with many responsibilities, and one of the most critical is ensuring that your financials are in order. You need accurate bookkeeping, tax preparation, and financial statements to stay compliant with the CRA and make informed business decisions. However, accounting fees can be a significant expense. The good news? You have more control over these costs than you might think.
Why Do Accounting Fees Seem So High?
As a business owner, you want the best value for your money. Accountants, particularly CPAs, are professionals who are held to high standards. Their goal is to get the job done efficiently and accurately. However, if you’ve ever received an invoice higher than the estimated fee, you probably felt frustrated. Maybe you even switched accountants, only to face the same issue again the following year.
This cycle often leads business owners to blame accountants for high fees. But in reality, the root cause is usually not the accountant—it’s the process. The good news? By understanding how accountants work and following a few key steps, you can reduce your accounting fees by up to 33%.
The Secret to Lower Accounting Fees
Accounting fees are largely based on time spent. Every additional task your accountant has to complete increases your bill. By streamlining communication and document submission, you can significantly cut down on the time required to finalize your financials. Here’s how:
When You Receive a Request for Information:
- Take the time to read it carefully. Try to understand what is being asked and why it might be necessary for your financial records.
- Complete the request in full. Gather all necessary documents and make sure everything is included before submitting.
- Ask for clarification upfront. If there are any queries you don’t understand, call your accountant and get clarification before responding.
- Submit all requested information in one package. A complete response helps the accountant work efficiently without needing to go back and forth.
- Respond promptly to any follow-up questions. The faster you reply, the less time is spent tracking down missing details.
By following these steps, you make your accountant’s job easier and more efficient, which translates to lower fees for you.
What You Should Avoid to Prevent Extra Charges
Certain behaviors can drastically increase your accounting fees. Here’s what to avoid:
- Sending multiple emails with separate attachments. Every email and attachment must be reviewed and documented, leading to more billable hours.
- Delaying your responses. If your accountant has to follow up multiple times, it adds administrative work, increasing costs.
- Questioning why specific information is needed. Your accountant asks for documents for compliance and accuracy. Instead of debating, provide the requested details.
- Claiming you already provided information. If you receive a request, it means the information is either missing or unclear. Simply resend it.
- Arguing about information requests. Any resistance or pushback only prolongs the process and leads to additional fees.
How These Mistakes Impact Your Accounting Fees
Accountants budget their time based on a standard process:
- One initial request for information
- One follow-up request if needed
This assumes that clients will respond completely and promptly. However, when delays and incomplete responses occur, additional work is required. Here’s how it adds up:
- Follow-up work requires extra billing time.
- Every email you send requires review and response, adding more billable hours.
- Incomplete information results in more review time, re-preparation of documents, and project delays.
- Multiple emails with multiple questions require additional responses, increasing the overall cost.
For example, if your estimated annual accounting and corporate tax preparation fees are $2,000, they could easily rise to $3,000 if you don’t follow these best practices.
How to Get Fixed Pricing and Build a Long-Term Relationship with Your Accountant
To avoid surprise invoices and ensure you get the best value for your money, consider setting up a fixed-fee agreement with your accountant. Here’s how:
- Agree on a set annual fee for accounting and tax services upfront.
- Commit to providing complete and timely responses to information requests.
- Build a relationship with a trusted advisor by maintaining clear and efficient communication.
When you and your accountant work together efficiently, you not only save money but also receive better service. Your accountant can focus on providing valuable advice rather than chasing down missing documents.
Final Thoughts
Accounting doesn’t have to be an unpredictable expense. By improving your responsiveness and organization, you can reduce your fees by up to 33%. Follow these best practices, and you’ll enjoy lower costs, fewer headaches, and a stronger relationship with your accountant.
At Dexado Accounting and Tax, we help small businesses streamline their financial processes to maximize efficiency and minimize costs. Contact us today to learn how we can help you optimize your accounting fees while ensuring compliance and financial success.
