How to Save on Accounting Fees

Most accountants will be happy to tell you how much they can save you on your taxes (which may or may not be true), but will they tell you how to save on your accounting fees.  As an accountant I am happy to do the work if you don’t want to, but there is always a balance between money and time that must be addressed.  If you can make more money per hour running your business than your accountant charges you, then keep running your business.  If not then you may want to consider the tips below.  These tips are directed to businesses (Small corporations and proprietorships) like consultants and small service providers with one or two employees.  If you have a high volume of sales and expenses you should seriously consider having someone in-house do your bookkeeping on a daily or weekly basis.

If the steps below don’t reduce your accounting fees, it may be time to look for a new accountant.

1. Invest in Quickbooks, Simply Accounting, or set up a really good spreadsheet to record all your sales and expenses.  Record expenses into the program of your choice on a weekly basis and mark the receipts so you know which ones have been entered.
2. Get a tote bin and hanging files to organize your receipts.  Wal-mart and Staples come to mind as good places to get what you need.
3. Organize expenses by category into separate file folders and or envelopes.
4. If you have to use a personal line of credit or personal credit card to run your business make sure you keep copies of the statements and document how much you have “loaned” your business.
5. If possible get separate bank accounts and credit cards that are used only for your business.  Again, make sure to document personal amounts if you have to pay the bills personally.  Better yet, transfer money into the corporate account then pay the bills from the corporate account.
6. Get your spouse to keep your records.  Record keeping is not that hard.  It is all in the organization, and in not letting the paper pile up.  (Tax tip:  This will allow you to do some income splitting and therefore reduce your  net family taxes)
7. At the end of the year total all your revenues and expenses by category and take the spreadsheet to your accountant.  From this point on your accountant just needs to make some adjustments and get information about assets, liabilities, home office, and vehicle use.

The key to reducing your fees is to be organized and knowledgeable about the “paper” side of your business.  If you “don’t have time” or feel “paper pushing is a waste of time” you will have negative consequences to deal with.  Firstly, you are likely going to pay CRA more than you should, or be selected for an audit due to non-compliance.  Secondly, you will pay high accounting and bookkeeping fees to have someone else organize your records for you.  The more organized you are the better off your business will be.  If this doesn’t reduce your fees, you have a really good accountant already or need to shop around.  I am betting on the latter.