MINIMISING ACCOUNTING COSTS
We would like to take this opportunity to provide you with information that will assist you in minimising accounting costs. Especially now that the GST has created the need to maintain better records and the need for more regular reporting and accuracy on a timely basis when attending to taxation matters.
Firstly it may help if you understood the process which is undertaken by the team here at Macarthur’s MSVDH to complete your job. Some common questions that are asked are these:
How Do Accountants Charge?
Our firm charges by time. The longer it takes to prepare a clients matter the dearer it’s going to be. Some businesses sell hamburgers, Real Estate Agents get paid commissions, and Accountants sell time. The more presentable you submit your accounts, the quicker we get it done, and the more cost effective it is. We only have 7 hours per day to sell and we would not be in business if we gave our product away.
Can You Give Me A Quote For The Job?
Just like it’s impossible to quote a building job over the phone without looking at the plans, or value jewellery over the phone, it’s not possible to know how long any accounting work might take.
Why Is My Bill So Much More This Year Than Last Year?
There is a lot more work this year. Example: could be an extra lease or turnover / activity has gone up, extra things you require us to do. Capital gains tax calculation, sale/purchase of business. Purchase a new investment property or lease/hire purchase plant and equipment.
Increase in our charge out rates as our labour costs are going up every year.
Due to missing information. If info is missing your client manager will leave the job, pick up a new job and won’t come back until the current job is complete. The more often a job is put down and picked up the more time is added to the job.
It is in both ours and the client’s interest to complete the job quickly so we can get onto completing the next job therefore giving the client a lower bill. We then earn the same amount of money and have a lot more happy clients.
The MYOB/QuickBooks Salesman Said That The Software Should Reduce My Accounting Costs But It’s Actually Doubled? (In Some Cases Tripled)
Basically garbage in, garbage out. It takes much longer to sort out garbage.
The most frustrating thing (and every Accountant says the same thing) is when a client gives us a year worth of computer printouts (after they have spent hours getting it to this stage) and then we have to spend hours and hours sorting out the mess. Efficient computerisation of your accounts depends solely on the operator. If the operator is good then it will definitely reduce time.
However if the operator is not good then it will take a lot more of our time and in some cases the need to use a more qualified client manager to try to sort out the mess. If the operator is good then it’s much more cost effective to use a bookkeeper service and we can use a more junior staff member to process it at a lower charge out rate saving you money.
You’re my Accountant why is my Client Manager preparing my Tax Return?
It’s more economical to you. It’s silly to use a surgeon to stitch a minor cut when a GP can do it at a much lower cost. The surgeon cannot do it any better than a GP. It’s an over kill to have a surgeon do it.
There has been some confusion recently about the role of your client manager. He / she handles your day-to-day needs including preparation of Income Tax Returns. They may or may not have the experience to answer investment, strategic, structural, tax planning questions. That is NOT their role. The partners look after answers to those questions. You may like to direct your questions in the first instance to your client manager. If they are unsure of the answer they will either find out or a partner will call you back with the answer.
If you are unsure of an answer given to you by a client manager please do not hesitate to confirm the answer with the Partners.
When will the partners look at my Tax Return?
The Client Manager processes all the accounts and produces a draft set of accounts. He / she then goes to the Partner who then discusses the Tax Planning. It’s this tax planning session that could save you thousands in tax. The partner spends quality time and the client manager spends quantity time. The client manager then finalises the accounts according to the Partners instructions. Sometimes the client is called in to discuss various problems or look at options. This process is similar to the surgeon and the nurse or the mid-wife and the Obstetrician. These processes are designed to minimise the costs to the client / patient.
I asked you to run your eye over this document and you send me a bill
Don’t forget our business is to sell time. If the task takes less than 3 minutes (like a phone call) then it’s done for free. More than 3 minutes it’s charged (including phone calls). We only have 7 hours per day to sell. If we give it away for free we would not be in business and be able to offer our services.
Whenever we request an answer to a question from our tax solicitors they send us a bill. Once again based on the time spent (at $350 / hour). It’s not unusual to get a bill for $87.50 for a 15-minute phone conversation. This is standard practice. We understand that if we want their time we have to pay for it.
Why has it taken so long?
a) In the peak period it will take longer.
b) Missing information will delay the job.
In the PEAK PERIOD between August and March the turn around time may stretch out to 3-4 months or more, as every one wants their work done in this period. Every Accountant in Australia is in the same boat. So please be patient in this period.
In the OFF-PEAK PERIOD between April and July turn around time drops back to a few weeks.
Just like there are peak and off-peak periods for holiday accommodation every Accountant is in the same boat. So be prepared for delay in the peak period between August and March. Remember how hard it is to get accommodation during school holidays.
PAYING ACCOUNTS ON TIME
Please help us to provide you good service by paying your accounts on time. Without payment we cannot provide the resources to give you prompt service. Some clients take a long time to pay but expect us to drop everything and attend to their needs immediately. It must be a two way street.
You have to get the best service possible and we have to be given the opportunity to provide it within the constraints available to us.
11 STEPS TO HELP YOU MINIMISE ACCOUNTING COSTS
- Efficient computerisation – make sure that you understand the computer packages you buy and the allocation of income and expenditure items.
- Provide all the information in the first instance
- Summarise and reconcile as much as possible.
- Explain any unusual events at the initial meeting with your client manager.
- Ask yourself the question “can I attend to this without contacting my client manager” ie. Sometimes you may contact us to fax copies of documents, which you may already have in your possession.
- Discuss with your client manager areas that can be improved or work that you can do to present the job better.
- Use your client manager for minor things and use the partners for the important things.
- Use the Secretary for secretarial matters and not the partners
- Provide missing information quickly.
- Do most of the running around yourself eg. Calling banks / solicitors, collecting statements, etc.
- Use email to ask for answers to questions.