High SMSF accountant's fee

[RogueTrader273]

My accountant has just prepared my tax return for my SMSF and mailed me a bill along with the tax papers to sign for a bit less than $3000 (includes audit). This seems an outrageous amount for an SMSF that has only switched funds of around $200k from one bank account to another and made a couple of dozen share trades.

What are my obligations here please? Obviously he's due some amount for the work he's done, but there's no way it's worth that much! Frankly I just want to get shot of this guy and switch to somebody who charges a reasonable rate without trying to gouge me. Btw I only made a profit of a few thou from the trading. Thanks in advance!

 

[tech/a]

My accountant has just prepared my tax return for my SMSF and mailed me a bill along with the tax papers to sign for a bit less than $3000 (includes audit). This seems an outrageous amount for an SMSF that has only switched funds of around $200k from one bank account to another and made a couple of dozen share trades.

What are my obligations here please? Obviously he's due some amount for the work he's done, but there's no way it's worth that much! Frankly I just want to get shot of this guy and switch to somebody who charges a reasonable rate without trying to gouge me. Btw I only made a profit of a few thou from the trading. Thanks in advance!

Ask him for an itemized written justification of his account.

 

[Julia]

My accountant has just prepared my tax return for my SMSF and mailed me a bill along with the tax papers to sign for a bit less than $3000 (includes audit). This seems an outrageous amount for an SMSF that has only switched funds of around $200k from one bank account to another and made a couple of dozen share trades.

What are my obligations here please? Obviously he's due some amount for the work he's done, but there's no way it's worth that much! Frankly I just want to get shot of this guy and switch to somebody who charges a reasonable rate without trying to gouge me. Btw I only made a profit of a few thou from the trading. Thanks in advance!

You are experiencing the result of not having asked for a written quote before committing to have the work done.
I did the same many years ago in that I accepted a verbal quote for the work, naively assuming the accountant regarded that as a firm price.
She did not. And I received a bill for almost twice as much as the verbal quote.

Did you get any sort of quote before giving the OK to go ahead with the work?

 

[Muschu]

Ask him for an itemized written justification of his account.

I agree. At this stage I suggest you need the hours worked by various parties (includes secretarial work) and the hourly rate for each.
ie: $X/hour for accountant; $Y/hour for clerical input etc.
Auditor's fee should be a separate item.

The fee may or may or may not be excessive - but you need more info.

Julia's point is important. I always ask for a quote. If that is within my expectations I find no need to ask for the finer detail.... But I have been with the same firm for quite some years. They want my business and don't go over the top. I don't ask for a written quote any more and the accountant has been true to his verbal quote.

Regards

Rick

 

[RogueTrader273]

Yes it's true, I was foolish and naive enough to trust an accountant not to present me with an outrageous bill - I won't be so stupid in the future! Safest just to assume they're all dishonest lying b*****d's until proved otherwise...

 

[Julia]

Yes it's true, I was foolish and naive enough to trust an accountant not to present me with an outrageous bill - I won't be so stupid in the future! Safest just to assume they're all dishonest lying b*****d's until proved otherwise...

Isn't that a little unreasonable? Others have confirmed that they pay a similar fee. I have had quotes for up to $5000 for what I now pay around $2000 for. It is an unregulated industry as far as fees are concened.
Would you go to a mechanic and say 'hey, my car needs this, this and this done, please fix it' without asking for a cost estimate?
No different buying a service from an accountant.
If you were to get him to provide an itemised account, I'm sure we'd all be interested to see how the charge has been justified, and it might help you feel better about either paying it or asking for it to be modified if you still feel it is unreasonable.

 

[RogueTrader273]

Actually I think he's trying to treat my account as his own ATM. How on God's earth can you justify charging nearly $3000 to advise the ATO of a change of bank account and some share trades? (With all details provided on a spreadsheet.) It's just legalized theft and I feel I'm being taken for a sucker. For instance eSuperFund I'm told does a great job including audit for only $700.

 

[elbee]

Whether a particular fee is justified or not can only be determined with full knowledge of the facts.

I presume from your comments this is the first time this accountant has done work for your fund but you don't say if the fund is new or if it has been audited before.

Some accountants are set up to handle SMSFs efficiently, some aren't and don't particularly want the work. There are special requirements on SMSF auditors.

Taking on a SMSF audit initially requires a good deal of work in ensuring the fund has been set up correctly and the trust deed and minutes etc are appropriate. How records are presented to the accountant can have a big impact on the fee as a great deal of time can be spent recreating transactions if the records are not in a logical or consistent manner.

 

[RogueTrader273]

This is about the fourth time with this accountant, so it's already set up.

The audit is outsourced to a guy who charges between $300 - $400, and the last
year's return cost me about $2000, which is still pretty high for a fund which is
pretty static.

 

[Miss Hale]

We used to pay the same amount for our SMSF, it sounds to me like the standard accountant's fee for this work. One of the reasons we got rid of our SMSF.

 

[Julia]

This is about the fourth time with this accountant, so it's already set up.

The audit is outsourced to a guy who charges between $300 - $400, and the last
year's return cost me about $2000, which is still pretty high for a fund which is
pretty static.

Pretty static? Earlier you described a couple of dozen transactions, didn't you?
So what are you doing about it other than complaining on here?
Have you phoned him and asked for an appointment to discuss the bill where you can express your disquiet and give him a reasonable opportunity to explain how the cost was arrived at?

 

[Ves]

From the little information provided this fee seems reasonable and about the industry average if there were multiple bank accounts (with transfers), monthly interest on both, a few dozen share trades etc.

 

[RandR]

From the little information provided this fee seems reasonable and about the industry average if there were multiple bank accounts (with transfers), monthly interest on both, a few dozen share trades etc.

Expectation ....... meet reality

 

[RogueTrader273]

From the little information provided this fee seems reasonable and about the industry average if there were multiple bank accounts (with transfers), monthly interest on both, a few dozen share trades etc.

Ves - I've been discussing this on several forums and so far the only people who thought the fee was
fair were accountants. Are you an accountant Ves?

Though one accountant who charges $1500 told me "Mate - you have been ripped off ."
http://invested.com.au/5/high-smsf-accountants-fee-40089/#post87501

Julia - static as in I'm not investing in a bunch of different areas, so it SHOULD
be fairly simple. Two dozen trades sent to him on a spreadsheet shouldn't be
difficult to process, unless he's doing it manually, which is then his own fault
for not getting decent software.

What am I doing? So far I'm waiting on an itemized account...

 

[Julia]

Ves - I've been discussing this on several forums and so far the only people who thought the fee was
fair were accountants. Are you an accountant Ves?

Julia - static as in I'm not investing in a bunch of different areas, so it SHOULD
be fairly simple. Two dozen trades sent to him on a spreadsheet shouldn't be
difficult to process, unless he's doing it manually, which is then his own fault
for not getting decent software.

I've been surprised at the information that is required to be included in the SMSF tax return. Certainly not required by me as the client, but demanded by the legislation. But you'd imagine there would be the appropriate software available to minimise the time taken to provide this.

What am I doing? So far I'm waiting on an itemized account...

Thanks: hope you'll share it with us when it arrives.

 

[RogueTrader273]

A quick look at Ves's previous posts and I find: "I'm a Fund accountant specialising in SMSF."
Who woulda thunk? Yes Ves, OF COURSE all you bean counters deserve to be paid at
brain surgeon rates - not!

 

[Ves]

But you'd imagine there would be the appropriate software available to minimise the time taken to provide this.

Nah, that's not the problem. It's the fact that you have to check, reconcile, balance, verify.... or basically go over every single with a fine comb. It's not like business services where you only check or reconcile the highly material accounts.

I can't rely on your spreadsheet. It is not third party documentation.

The processing is cake. The workpaper file for the auditor (and of course for the ATO if they even want a sneak peak) is where the fun begins. The compliance review checklists are tedious. We have to do minutes and "cover your ****" pieces of paper for every small thing now. If you don't have them the CPA or CA generals come wandering into your office come compliance audit time and tell you to fix your processes. The legislation and ATO regulations are so damn convoluted that is necessary. All of this was made clear to you when you signed the trustee declaration and read the "welcome to life as a SMSF trustee" package the ATO gives out and papers all over their site.

The average accounting firm will only have an SMSF fee base of $500k-1 mil per year. In most cases it could be a lot less. 40% of this will be taken up in overheads. To get accounting software that is not full of what I would consider technical issues you would be paying in excess of $50,000-$100,000k a year. The small firms, because this is a specialist industry now, will probably not realise there are too many technical issues, but they may find that the software often does strange things. A small show isn't going to afford highly sophisticated software because the scale is just not there.

The whole industry is a joke - I said the fee seemed reasonable considering what the industry charges, not that I actually think it's fair. I actually feel insulted by the OP, considering I probably earn less than he does.

If you think you are being charged too much by the industry buy a single user software license and do it yourself. Then go down the road to your friendly two-bob auditor and get the thing signed off. Actually it pisses me off that you don't - because I have to deal with smart arses like you day in and day out.

 

[IFocus]

I pay around $1500 to $2K, $3K seems excessive to me but you need to get their side of the story why 1st IMHO.

 

[Ves]

I pay around $1500 to $2K, $3K seems excessive to me but you need to get their side of the story why 1st IMHO.

Depends. A lot of firms who charge that much cut a lot of corners. You probably will never know, either. Not trying to scare you - just stating what I've seen. I've received accounts for Funds that we have taken the admin over for in the past that scared the **** out of me.

 

[Ves]

Screw this whole debate. Now I feel angry. Reminds me of Monday morning not the weekend.