Why accepting the cheapest accountancy quote could be jeopardizing your business!!
When we compile an accountancy quote proposal for a prospective client, sometimes we get a kind reply saying, “Thanks for the proposal, however we have gone with a cheaper quote” … this mindset reaffirms to me why so many businesses close down in the first two years of trading.
When going to an accountant you are paying for two things – their time and their expertise. The less you pay them the less time they have to work on your business.
Experienced Accountants have a vast knowledge of other businesses, including those in your sector, they see on a daily basis, what works well in their client’s businesses and what doesn’t. What your industries average numbers are such as gross profit margins and breakeven points.
When growing a business your accountant should be an integral part of your company, with their knowledge about numbers and what works in your sector. A switched-on business owner should invest in their accountant, so they are then able to spend as much time as they can working on developing their business.
Therefore, when looking at accountancy proposals how is taking the cheapest quote going to benefit your business?
This is the question you NEED to ask yourself …
When looking at proposals you should be asking the accountant “what value they are going to bring to your company” for your investment, how they feel they can “assist in the growth of your business” and if they have any other clients in your sector.
Just think for a second …
I’m going to extremes here but say two accountants with the same knowledge and experience have the same amount of hours per week (they both work 38 hours a week).
Both accountants turnover £10,000 a month; accountant one charges £600 per month per client so needs 17 clients, whereas accountant two only charges £150 per month per client so would need 67 clients.
Now accountant one has 17 clients and so can allocate 2.25 hours a week to each client (that’s 117 hours per year) compared to accountant two who has 67 clients and can only allocate 0.5 hours to each client (that’s 26 hours per year).
Which of these accountants do you think is going to be able to help you build your business and ensure you do it as tax efficiently as possible?
In summary if you want an accountant that can be more active in your business, to assist your growth, you will need to invest in their time.