Paying for CPA services can be expensive – painfully expensive. But chances are many business owners are overpaying for their accounting services and not getting equivalent value in return. Why is this the case? Are CPA services overpriced? Or are clients making the same mistake over and over again when it comes to their accounting services? Here are the key mistakes you might be making that directly increase your accounting fees.
1. Messy Books and Records
If you hire a CPA, then chances are they bill by the hour. The easiest way to increase your accounting fees is by having messy books and records – or no records at all. If you send your CPA a stack of invoices along with your bank statements, they will most likely have to spend more time on your return then someone who has a complete set of books.
The cost of a bookkeeper or outsourced CFO is less expensive than a CPA who bills by the hour. Hiring the right bookkeeper can make all the difference when it comes time to file your tax return. Instead of having to create your books from scratch, your CPA will just scan your financials and make minor changes.
Think of it like this – the cost of a bookkeeper is about $15 to $20 an hour, while the cost of a CPA can range from $100 to $200 an hour (in some cases even more). Don’t be afraid to spend a little bit more on a bookkeeper who know’s what they’re doing, because a cheap bookkeeper can raise your accounting bills even more.
2. Sending Incomplete Information
If you send in your tax data one PDF at a time, then chances are you’re inadvertently increasing your accounting fees. If your CPA has to dig through email chain after email chain to find your tax data, that means more time is being spent to file your return. And more time on your return means higher accounting fees.
Sending everything all at once allows your CPA to complete your tax return in one shot. If they have to dig through information and jump in and out of your return, then be prepared for higher accounting fees.
So, by sending your CPA timely and complete books, all at once, you’ll significantly reduce your accounting fees.
3. Sending Information Last Minute
If you send your tax data in last-minute, then odds are you’re going to inconvenience your CPA. It’s the same concept when you rush deliver a package through the mail – you’re going to pay a premium.
If your CPA has to work until 3 a.m. on a Saturday morning to get your return out in time for the deadline because you sent it in Friday night, then you can’t really complain about a high bill. Sending your information in early ensures that there isn’t a rush on your return which will significantly reduce accounting fees.
4. Paying For The Wrong Services
By having messy and incomplete books, sending information one document at a time, and sending your tax data in late, you are wasting money that could be spent on higher level services such as tax planning and preparing for the future. You wouldn’t pay a neurosurgeon to give you a routine physical, so why would you pay a CPA to comb through your shoe box of business receipts?
By getting organized, you can significantly reduce your accounting fees while increasing the value you get in return. If you have to pay for CPA services, then you want to make those dollars count. Hiring a CPA to do simple bookkeeping services can cost you hundreds of dollars, but hiring a CPA to plan for your future could save you thousands in taxes.