As a small business owner, keeping a close eye on expenses is essential, and that includes accounting costs. You might wonder if your accountant‘s fees are worth it or if you could handle it yourself using online accounting software. While there are arguments for both approaches, it’s crucial to know when paying for professional accounting services is worth the investment. In this guide, we’ll explore when it makes sense to hire an accountant, what you can expect to pay, and the factors that influence the cost. If you need expert help managing your business finances, Outside Accounting is here to assist. Contact us to learn more about our services.
When Can an Accountant Save You Money?
If your tax situation is complex, relying solely on accounting software might not be enough. A professional accountant can save your business significant amounts of money by navigating tax laws and financial nuances that you might not be aware of.
For instance, if you’ve worked overseas, your financials may be spread across multiple countries, including foreign superannuations, investments, or properties. Without expert guidance, you risk unexpected taxes, like capital gains due to fluctuating exchange rates.
Additionally, accountants can help you avoid the stress of audits and severe tax penalties by keeping you compliant with regulations that software might not fully address. They can also advise you on how to structure your holdings to minimize tax liabilities and can negotiate with the IRD on your behalf to reduce penalties and interest.
Tax laws are not only complex but constantly changing, making it difficult to stay informed without specialist knowledge. Even the CEO of the New Zealand Institute of Chartered Accountants employs a separate chartered accountant to handle his personal taxes because of the complexities involved.
While accounting software can be cost-effective for straightforward tax returns, if your financials are more complicated, working with a professional accountant is the best option. They’ll help you avoid unpleasant surprises during tax season and save you money in the long run.
How Much Can You Expect to Pay for an Accountant?
Accountants typically charge either fixed fees or hourly rates and should provide you with an estimate of the total cost upfront. If this estimate is likely to be exceeded, a professional accountant will inform you immediately to discuss the situation.
For a small business, professional accounting services can cost between NZD 1,200 and 2,000 per year. The cost depends on the complexity of your business needs, the comprehensiveness of the services provided, and the accountant‘s skills and experience.
A typical accounting package may include:
- End of Year Accounts
- Income Tax Returns
- GST Returns
- Annual Financial Statements
- Management Reports and Statements
- Tax and Provisional Tax Management
- ACC Reviews
- Companies Office Records Management
You can reduce costs by handling some bookkeeping yourself using accounting software. This allows your accountant to focus on providing business and structuring advice, helping you save even more money.
What Factors Affect the Cost of an Accountant?
Accountants charge based on time spent on your account. The better organized your financial information is, the quicker and more cost-effective the services will be. Here are some factors that can influence the cost:
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Complex Workload: If your financial data is disorganized or if your business undergoes significant changes, your accountant may need more time to sort things out, leading to higher charges.
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Missing Information: If your accountant has to request additional information from you, this will increase their time and, consequently, your costs. Using checklists provided by your accountant can help ensure you supply all necessary details upfront.
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Rising Wages: As the cost of living increases, wages rise as well, leading to higher prices for accounting services and software over time.
As demonstrated, accountants do much more than just basic tax and compliance work. The right accountant can simplify your life and offer advice that significantly reduces your tax burden.
The team at Outside Accounting is one of New Zealand’s leading online accounting firms. If you’re looking for skilled professionals to manage your business finances and ensure you’re not overpaying in taxes, contact us today.
Your Outside Team
Contact
Address: Level 2, 182 Vivian Street,
Te Aro, Wellington 6011, New Zealand
Mail: PO Box 24-457, Wellington 6142
Phone: 04 889 2975
