How Much Should I be Paying My Accountant?

Hmmm...

A difficult question to answer but one I'm asked quite a lot.

Before having a go at answering this particularly thorny question I need to go back a little bit to explore the nature of 'price'.

First things first, then.

There is no such thing as cheap or expensive.  There is only value for money or not value for money... whether someone can afford something is an entirely different issue.

For example, I quite like cars and I quite like Bentley Continentals.  There's a Bentley Continental GT Speed for sale at the moment which starts from £168,900.

Is this cheap or expensive?

Well, in my heart of hearts I know that it's pretty good value for money (although other opinions may differ) and if I had the money I would buy one.

But I don't have the money, so I can't buy it in any case.  Does that mean it's expensive?  No... it just means I can't afford it.

And it's the same with your accountant - are they cheap or expensive?

Well, neither, actually.  They're either providing you with good value for money or poor value for money.

So the question is not is your accountant expensive, it's what's good value for money?

Here we get into the realms of opinion.  Just as I think the Bentley Continental GT is good value for money others will think it's a monumental waste of dosh - why on Earth would anyone spend such a vast amount of money on something that does the same job as a car that cost, say £20,000... or £10,000?

It all depends on what you're looking for in your car or accountant.  For me, what I believe to be good value for money is an accountant who is proactive - who contacts you with relevant information or ideas or suggestions for changing things around.

I also think good value for money is an accountant who charges a fixed fee that doesn't vary if you call a couple of times a month, or you pop into their office.  And don't think this is entirely altruistic... it's a win-win.  If you ask your accountant's opinion of for advice and they are able to help you out it just means there's one less thing for them to sort out at the end of the year.

Finally, I think good value for money is transparent.  You should know what you're paying up front and there should be nothing hidden because then you can budget correctly for period ahead.