When Could An Accountant Save You Money?
If your tax position is at all complicated, it’s worth turning to a professional for advice instead of simply relying on accounting software for your small business. A qualified accountant could potentially save you large amounts of money that your business could otherwise lose simply because of what you don’t know.
If you have worked overseas, you might have financials spread across multiple countries. These could include foreign superannuations, cash deposits, investments, or mortgage property in New Zealand and elsewhere. Plus, you also risk being hit with unexpected taxes, for example, if changes in foreign exchange rates result in ‘capital gains’ on your holdings.
Drama of Audits
An accountant can help you avoid the drama of audits and severe tax penalties due to regulations you might not even be aware of, which an accounting software for your small business would be unlikely to show you. Professional accountants can also advise you on the best possible way to structure your holdings, to minimise the impact of costs on your tax bills.
An accountant can also act as an intermediary between the IRD and their client. Your accountant can negotiate arrangements with the IRD, which might reduce penalties and interest.
What’s more, tax laws aren’t just complex – they’re constantly changing and evolving, especially as governments come in and out of office. Staying on top of them requires real specialist knowledge and up-to-date information. For instance, did you know that the New Zealand Institute of Chartered Accountants’ CEO employs a separate chartered accountant to handle his personal taxes because taxation isn’t his specialty?
Accounting software for your small business can be more cost-effective if you only need to handle straightforward tax returns. But if there is any complexity in your financials, the best option is to work with a professional accountant. They’ll help you avoid running into undesirable surprises come tax season, and save you more in the long run.
How Much Can I Expect To Pay, And What For?
Accountants should either charged fixed fees for their work or be upfront about an hourly rate and provide you with an estimate of the overall cost. If this estimate is likely to be breached, a professional accountant should immediately approach their client to discuss this.
Professional accounting services can cost between NZD1200 – 2000 a year for a small business. The specific price depends on whether they help set you up with accounting software for your small business, the complexity of your business’ needs, how comprehensive your services are, and the accountant’s skills and experience.
A typical accounting package will usually include services such as:
- End Of Year Accounts
- Income Tax Returns
- Preparing GST Returns
- Annual Financial Statements and Tax Returns
- Management Reports and Statements
- Tax And Provisional Tax Management
- ACC Reviews
- Companies Office Records Management
There are also ways you can save some of the costs if you manage a little bookkeeping yourself. Using accounting software for your small business to prepare your accounts can free up your accountant’s time- and reduce your costs. Your accountant can also focus on providing you with business and structuring advice and how you could save your money.
What Factors Can Affect The Cost Of An Accountant?
Accountants charge by time. This means that the better your information is presented, the quicker your accountant will be able to complete their work, resulting in more cost-effective services.
Here are other factors that can affect how much your accountant costs:
A Larger Or More Complicated Workload
If you inadvertently entered your data poorly in Xero, MYOB or similar accounting software for a small business, it could take much longer for your accountant to sort out your accounts.
Complicated situations, like a change in business operations, can also result in your accountant needing more time to complete their work, leading to higher charges.
If your accountant has to request more information from you, this will demand more of their time, resulting in higher costs. It’s worth asking your accountant whether they have checklists you can use, so you can make sure that you’re providing them with all the information that they need.
Changing Costs Of Wages
Costs of living rise year on year, which causes wages to rise, too. Due to this, both accounting firms and accounting software for small business usually increase their prices over time. This is why you might notice that you are paying more for your accounting than you did in previous years.
As you can see, an accountant can help you with much more than just basic tax and compliance work. The right accountant could make life much easier for you and offer you advice that would save you considerably on taxes.
The team at Consol Group are New Zealand’s leading online accountants. If you’re looking for skilled professionals who can help take your business’ financial management off your shoulders and make sure you’re not paying more in tax than you need, get in touch with us at 0800 001 851.
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