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E-Myth – “Why most small businesses don’t work & what to do about it”

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Edmonton Accountant | Understanding Accounting Fees

When choosing which accountant they need to to hire for their business, business owners often don’t know how to pick the right accountant, and end up choosing based on lower prices says Edmonton accountant. Unfortunately, choosing accountant based on price can often end up not only costing the business owner more in higher fees later on, but also can end up costing them in extra tax accountant doesn’t do everything the business owner is expecting.

Many business owners often look at price is the most important factor when they are choosing their accountant, or end up choosing to not pay for certain services in order to save money. Planning is one of those services that many business owners decide to avoid in order to save money says Edmonton accountant. However, business owners should understand that if they truly want to keep the expenses in their businesses down, it makes far more sense to pay for planning. The reason is so important, is because effective planning will help a business owner avoid paying taxes, which will help save them lots of money in the long run. Many business owners who are trying to save money don’t want to pay for this additional service, and end up not getting planning done in their business and therefore will start making bad tax decisions. Even though the accounting they will be lower, the business owner ends up paying more. By deciding to do they planning, the business owner will be able to often save more money in taxes than they would have to pay in and accounting bill. Business owners should aim to have their expenses low by minimizing taxes, which requires having an efficient and effective accountant and business plan in place.

Since business planning is so important, people need to understand that plans will take more time to do that tax returns and financial statements, especially with the increased technology that accountants can lose. It’s very possible says Edmonton accountant to do a financial statement in tax return in 2 to 4 hours. Business plans often take far longer to do to, and that is often a deterrent to many business owners. But they should understand that it’s important to do the business plan in order to ensure that they are minimizing the taxes in their business. Business owners should not only ensure that there accountants does business plans, but hire an accountant that is extremely good at doing those business plans.

Many business owners don’t know how to choose an accountant that is good at doing business plans, because they don’t know what an effective business plan should look like. Edmonton accountant says teaching entrepreneurs how to hire an accountant based on their business planning is important, but simple. The business owner should ask accountant what business plan looks like when they’re done, and they should be able to show the business owner a document that is a great example of the business plan they create.

When choosing an accountant, many entrepreneurs don’t know what they are looking for says Edmonton accountant. They call around asking for free quotes over the phone, because they don’t know how much they should be paying for accounting services per year. However business owners don’t understand that free quotes over the phone you won’t give them an accurate representation of how much they’re actually going to paying and accounting fees. As well, by going with the lowest price accountants may end up in increased fees later on, or end up with an accountant who isn’t able to effectively save them taxes, which will cost them far more in the long run.

Business owners should understand why they can’t get a quote for services over the phone. Chartered professional accountants are bound by a code of ethics that requires they fully understand the business before they can offer a quote to potential customer. Good accountants will offer a free first consultation in order to completely understand the business in order to quote on that job. Business owners should be very wary of accounting firms that either will give a quotes over the phone, or charges for their consultations says Edmonton accountant. When they do get their consultation, the accountant should be asking them questions such as how big their business is, how many employees they have, how much money do they make in revenue per year. Also they need to understand more motivations such as does the business have any challenges at the moment, is it being audited, is the business owner growing the business or planning on selling it?

They should also understand the three different ways that accountants charge for their services. The conventional way, and the way that most charge their clients is by our. Every hour that they are working on the business owners file, they are charging an hourly fee. The second way which is the second most common is a flat fee but per service. This means that there will be a flat fee for a year and for example. And the third way that is the least common way is a flat fee that is charged monthly. Accountant reviews the business, and creates a set fee per month that the business owner will pay. Being charged by the hour often creates an adversarial relationship between accountant and business owner. The business owner wonders if the accountant is charging accurately, or if they are adding services in order to increase their price. And the accountant themselves, is in a situation where the longer they take on a job, the more money they can bill. The flat fee per service, ends up not including a lot of other charges such as business planning, or calling the CRA of the client, which drives up the flat they per service price. However says Edmonton accountant, flat fee per month brings the balance back to the relationship, the business owner can bring things to the accountant’s attention without worrying it’s going to increase the price, and the accountant is going to want to charge enough for their services that they make money, but not more money than the business owner can be comfortable paying on a monthly fee.