Fixed Fee Accountancy – Is it Right for Your Business?
Very few, if any, businesses start up with unlimited budget for accountancy fees. Indeed some small businesses don’t even use an accountant in that first year as there are plenty of other expenses that mount up and this is one area where they might think they can manage without professional help, particularly if the business is fairly straightforward. But sooner or later most businesses will start to recognise the benefits of using an accountant and once you do, how can you keep the accounting costs under control and budget effectively for those costs?
The simple answer is by using a fixed fee accountancy service where you know exactly what you will pay at the start of the year and where you can also spread the cost by paying for the services monthly.
Whether you own a small business requiring just preparation of year-end accounts and submission of tax returns or a growing business that needs frequent reviews and tax advice, budgeting with a fixed fee monthly payment is a practical option and is available with different levels of service to suit different types of business.
Of course, any fixed-cost service has a fixed amount of work built in so some start-up businesses might be concerned that they will have queries during the year that are not covered by their agreement with their accountant. Start-up businesses often don’t know how the business will develop in any given year or how complex it might become. They may find they need regular tax planning reviews or frequent telephone support that they had not anticipated at the start of the year. It can be difficult to assess just what level of accounting services you might require in advance.
Talk to an accountant about the most appropriate level of service for your type of business; they will be able to offer advice on the most suitable fixed fee accounting package and deal with any concerns regarding whether the fixed fee approach is right for you. They will also be able to suggest options should any service not meet your requirements, such as upgrading to another service or bolting on the services you need to your existing package.
A fixed cost approach to your accounting needs with a professionally regulated and qualified chartered accountant should deliver the same level of service as any other type of arrangement.
The accountant will be able to offer businesses of all sizes services such as the following under a fixed fee accountancy agreement:
- Preparing company accounts
- Preparing management accounts
- PAYE and VAT submissions
- Company tax submissions to HMRC
- Submissions to Companies House
- Handling HMRC investigations
- Self-Assessment advice
- IR35 Tax planning and Advice
- Dividend advice
- Extraction of Profits
If you are already using an accountant that does not offer fixed fee accounting you need to ask yourself why.
Is fixed fee accounting really suitable for all types of business or is it aimed at small businesses? How do you assess a business and decide which package would be right? Eg a small limited company with only 2 directors and 4 employees running an online retail company, what would that require – just the basic package. That would certainly help with budgeting but I guess there is always the possibility that the business grows – is it easy to switch to a different package mid-year, otherwise there would be no advantage from a budgeting perspective.