Should accountants charge to bring your old accounting records up to scratch?

During your career as a contractor, unless you’re extremely fortunate, you’re likely to change accountants at some stage.

From our experience, this is often due to poor service, particularly lax communication. Overpricing too, such as a sudden unjustified price rise, rarely fits well with a typical contractor.

What happens when you change accountants?

Either way, when you change firms, your new accountant will need to make contact with your old accountant to arrange a handover of your accounts.

All your accounts and related information will need to be updated (and in many cases, fixed), and transported into a new accounting system.

As explained in this article on changing accountants, once you have told your current accountant that you want to leave, your new provider will arrange for the handover of paperwork, and liaise with the tax authorities to tell them that they will be looking after your accounts from now on.

The process is usually (but not always) simple

The contracting industry is relatively small; accountancy firms are used to gaining and losing some clients to their competitors, and it is therefore in no-one’s interests to delay the handover process or make things difficult for the new accountant.

For new contractors or contractors who have up-to-date (and correct) accounts in tow, the process of moving over new a new accountant is often a simple one.

However, this is often not the case. If you have had a bad experience with a past accountant, your paperwork may be out of date, or you may want to move accountants before your previous year’s company annual accounts have been completed.

How much can you expect to pay to complete your accounts?

Many small business accountants will charge in excess of £500 just to complete your annual company accounts – it is the most time-consuming element of the accounting lifecycle.

It is for this reason that your new accountant will typically charge an initial fee to complete any accounting work which is outstanding. It would be unfair to expect a new accountant to accommodate a new client’s needs regardless of the amount of work involved.

You will rarely find accountants who will quote a fixed fee to complete old accounts without having seen the extent of the work involved beforehand.

Accountants will either quote you a fixed one-off fee to complete your accounts or quote an hourly rate. For obvious reasons, it is always preferable to get a one-off quote to bring your accounts up-to-date.

At the same time, the prospect of gaining a new client who might stay on the books for many years is an attractive one to contractor accountancy providers, especially in such a competitive market. So don’t be afraid to negotiate a discount on this initial work.

Further reading

About the Editor

  • James Leckie

    James is an experienced business and finance writer. He studied economics and worked for large companies including British Airways, Citi and JP Morgan before working as a data analyst IT contractor in the late 1990s and 2000s. He founded Contract Eye in 2006 and also writes widely for a number of popular business sites. Connect with James on LinkedIn.

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Last updated: 27th September 2019