I need an accountant to help with our business plan, book keeping, cashflow, management accounts and tax advice. How much will this cost?
The answer to your question depends on a number of factors, particularly the number of transactions (sales, purchases on credit, payments and receipts through bank accounts, etc) the business undertakes, the number of employees and the extent to which you keep the records yourself.
A business plan is usually prepared every three years (more frequently if there is a significant change in the circumstances such as a major new order or a refinancing of the business required. A minimum charge for assisting you prepare a business plan would be £2,000, but it could be much more.
Writing up the records should be undertaken regularly – at least monthly and may best be undertaken by the accountant visiting your premises. Providing the basic information is well maintained this might take two to three days a month which might cost £1,000 per month. However, if you can find a good book-keeper you should be prepared to pay £20+ per hour, although the level of skills will be lower, they should be familiar with the way accountants prepare annual accounts to prevent unnecessary duplication. On the other hand, if you use the accountant who prepares the annual accounts, the costs of the annual preparation should be less due to the day-to-day bookkeeping undertaken
Once an annual budget has been prepared and phased into monthly or weekly figures it can be integrated into the monthly management accounts. This would depend upon the complexity of the operations and the number of transactions. Preparing a budget entails discussions with the key people, looking at previous figures, producing a draft budget and discussions with the key stakeholders over issues such as how much finance is required, do the results satisfy the shareholders. Over a period of one to two months this might take five to six working days, and cost between £3,000 and £5,000.
Tax advice requires information from the basic records as well as the preparation of the financial reports. There will be tax returns for the directors to be filed as well as benefits in kind (P11D) statements and corporation tax returns. This might cost between £2,000 and £5,000.
You should contact at least six accountancy practices, talk to them on the telephone and visit at least three. After a discussion about the business, its records and your needs, they should be able to provide an estimate of costs. If you have a larger number of transactions or more complex issues such as management of working capital, you might also think about hiring a part-time finance director, as an alternative to a practising accountant, to undertake the budgeting, business plans and to oversee the basic record-keeping. A part-time finance director would cost a minimum of £500 per day, but some are prepared to negotiate a lower figure for a longer term commitment.
To find a practising accountant go to the ICAEW Directory of Firms.
For a part-time finance director search under interim finance director. Make sure the person you consider employing is a chartered accountant who will have the initials ACA or FCA after their name.