Academy Chartered Accountants Limited
Chartered Accountant
You are here: Accounting Services - How to save on accounting fees

Accounting Services

How to save accounting fees

Professional job

If absolute cost is more important to you than value for money, then you'll find apparently cheap tax services around. Our professional standards mean we can never compete on price with those who don't have comparable - or any - standards.

As always it is a case of caveat emptor. As in area of expertise, be it drainlayer, doctor, builder or whatever, most of us only recognise a poor-quality job when it comes back to haunt us. In the case of accounting and tax, this is usually when IRD discovers an issue. This can sometimes be several years after the event, and penalties and interest can multiply the original error several times over. In one particular case a client had saved perhaps $1,000 in fees by using a non-professional tax service. However, they missed out on a $50,000 GST refund - and this error could never be adjusted - it was permanent.

As Chartered Accountants, we have to undertake regular training to keep up to date. We have to comply with professional standards, hold professional indemnity insurance, and are subject to professional review.

Our personal commitment to quality and value for money in everything we do further reduces your risks. Our focus on the bigger picture means we don't see numbers as the end of our job. Rather we look at the numbers to see if they highlight issues that need to be dealt with.

However we will never cut corners to meet a budget if those corners are illegal or dangerous to the health of your business or your family.

KISS

The first and most obvious way to reduce your fees is to keep things simple.

There are good reasons for having multiple entities - sometimes that is the simplest way to do things. For example a trust is often a great vehicle for holding assets and investments. A qualifying company is often the best way to own investment real estate. If it is going to make losses, then this can be a loss attributing qualifying company. Keeping GST activities in separate entities from exempt activities can also simplify GST returns.

Of course the majority of your personal transactions should also be kept separate from business transactions.

Good records

This may seem obvious but still some business owners expect their accountant to process the proverbial shoebox of documents at year end. This is expensive! In fact we will not work that way after the first year. It is a waste of everybody's time - and to be honest, we just aren't interested. We may be able to recommend a bookkeeper for you, but even then it may not be easy.

As a bare minimum ALL income must be banked into a business bank account, and all expenses paid from that account. Of course you can use other accounts to earn interest on surplus funds, put money aside for various taxes, pay by credit card, etc., but you must not mix business and private expenditure.

ALL cheque butts and ALL deposit slips must be completed, showing the date, other party, value and what the transaction was for.

All loan, H/P and other financial transactions and information must be kept.

Good systems

Technology means anyone can do their own accounts in a modern computer-based accounting system. Yeah right!!! Our years of training at university and under other professionals and via ongoing education courses are not just to fill in time. Of course you don't need to be a qualified accountant to operate an accounting system, but you do need someone with that background to make sure your system is set up and operated to produce correct results.

If the information in the system is unreliable, then it's no better than the shoebox. In fact it may be worse, in that the system may tell you that you are making a profit when you are making a loss - or vice versa.

There are really only two solutions to this: outsource - or build up your in-house skills.

For outsourcing there is really only one cost-effective solution we recommend and use - BankLink. This system lets us download your bank transactions monthly, process your GST and provide basic reports as required. It also means that producing your financial accounts and tax returns is much simplified.

If you run a computer-based accounting system, we will use that as your main accounting system - if it meets NZ standards. (This does not include, for example, MS Money.) We will review the system with you to identify errors. Initially we may do this for every GST return - but as you gain skills, we will need to do less reviewing.

We will also do most of the accounting in your system. At year-end, we will take your nearly-final data into our system, make final adjustments, produce your financial statements and tax returns, and update your system so that it matches the final published statements. This last step also makes it easier for you to produce meaningful interim reports during the year, and for us to process the following year's accounts.

And best of all, we can offer these services and our support for your package remotely - as your virtual accountant.

So read on -


next page - So you want your own accounting system?