The cost of an accountant for your New Zealand business

Dealing with accounting can be tedious and stressful, but it’s a necessary chore for every business owner. It can be challenging to balance your business, maintain good accounting records, analyse financial statements, and comply with tax deadlines. Hence, hiring an accountant is a wise decision. Although it’s considered an overhead expense, paying an accountant ensures that your finances are in check, comply with the law, and often save you far more in tax than you spend on the accountant’s fees.​​

The cost of an accountant in New Zealand ranges from around $1,000 to $5,000 per entity per year, this could be either a fixed monthly fee or an hourly charge (vary from $100 to $800). However, other factors, such as the scope of the work and the accountant's experience and expertise must be considered as well.​​

Bookkeeping and accounting are integral parts of your business’s finances. Many business owners think they are one and the same, however, there are a few key differences.​​

A bookkeeper is typically involved in recording business day-to-day transactions (e.g. payroll, invoicing, payment of bills). Their job is more repetitive. It does not require a lot of high-level knowledge or experience to be a bookkeeper. Normally, university graduates or business administrators with some training can take on the job. Their main focus is to make sure the accounting records are completed and up to date. ​​

However, an accountant provides insights based on the information key financial data. Depending on their experience and knowledge base, they can provide you strategic advice, tax planning for the future and more. They review the business’s financial statements, budget for the coming year, prepare and file tax returns with IRD, and analyse business performance for you. ​

The cost of an accountant commonly depends on several factors such as business size, expertise, business timing, experience level, level of accounting support you need, the tidiness of record keeping, and location.​​

There's a general rule that applies when it comes to the cost of a small business accountant: the bigger and more complex your business is, the more the accountant needs to review. Compared to a small business that is operating under a sole trader structure, larger companies may likely have more transactions. For example, if you own a residential property vs own a popular restaurant in CBD; the amount of the transactions in a year is different. This means accountants need to spend more time reviewing and filing your tax returns. ​​

At Beany, our fees are based on your business's gross annual income. The Form Package has a monthly fee of $145 (GST exclusive) if your annual gross earning is up to 250k. If your income exceeds this threshold, you can choose other packages such as Flow or Flex. ​​

Some accountants have vast experience in specific industries (e.g. construction, farming, real estate). The cost of hiring an accountant who specialises in the construction industry for example, might be higher due to its complexity. Not only do they have to know and comply with specific laws and regulations, but they also need to have an in-depth understanding of ring fencing, inventory, and bright-line rules. ​​

If you’re looking for an accountant closer to the date when your tax is due, the cost can also increase. Consult an accountant prior to filing so you avoid the stress of cramming and the extra cost of expediting the process. ​ ​

Another option is to hire an accountant who offers fixed monthly fees. For example, Beany breaks your accountant fees into 12 months and you pay a fixed monthly fee. The packages covers company tax return plus returns for 2 directors/shareholders, and Companies Office annual return.​

Your accounts are in good hands with Beany, we’ll send you an alert and your accountant will do everything you need after completing the hassle-free questionnaire (you save time sending heaps of paperwork to your accountant!).​​

Experience plays a role in how much an accountant costs. A certified accountant with more experience will be more expensive. Although you can choose to use a less expensive accountant, be sure to do your due diligence to see if they meet your expectations. In NZ, the commonly recognised certification for accountants are CAANZ. Be sure to find a good Chartered Accountant. They may appear to be expensive to start with, but in reality, the services they provide to you may save you more on tax or increase business sales.​

If you need more support from your accountant, that will obviously push the fee up. If you have no idea about accounting, you are likely in need of more help from your accountant to teach you, from the basic GST ruling, bank reconciliation and so on. However, if you have been in business for many years, you may already know all the tax deadlines, Xero functions, which requires less help from your accountant.​​

Businesses operating under different business structures have an impact on the level of accounting support you need. Sole traders won’t need the same level of support as a business operating under trust or company structures.  The bare minimum support you need from your accountant is to meet compliance with IRD. However, if you’re running a small business as a sole trader, your accounting and tax requirements will be more straightforward than trusts or companies. You can read more on business structure in this article.​

Read more: How to find the right accountant for your small business​

The better you keep your records tidy and up to date, the cheaper your accountancy fee will be. Some business owners have the idea to dump all information to the accountant at year end, and expect things to be tidied up nice and quick. It can be done, but it will also be more costly as more time and effort is spent digging into the records. ​​

Also, it is important to remember it is your business to start with. We generally find business owners with good record keeping and willingness to learn accounting knowledge will have good business results and keep accounting fees low. With the help of technology, it isn’t that hard. When you make a large purchase, simply take out your phone and take a photo of the invoice, and upload that to Xero straight away. This can reduce the work for your accountant at year end, asking you about an invoice back in November, which you will find hard to recall what you bought and where the invoice was.​

In general, it is cheaper to find an accountant in a big city e.g. Auckland, compared with a smaller town. There is more competition in a big city, which can push down the accountancy fee. However, the key isn’t to find the cheapest one, but the best one at a lower cost. ​

It is common for business owners to believe that they don't need an accountant if they’re using accounting software. But the truth is: it is better to have both. Technology certainly helps, but hiring an accountant will ensure you're properly guided and compliant with laws and regulations. Having them on board can not only help you improve your financial systems, but also eliminate the headache when it comes to understanding the nuances behind the key numbers and enabling you to grow your business further.​

Read more: How to find the right accountant for your business​​

Beany are accountants for ambitious businesses, delivering big firm expertise without the big cost. We handle everything accounting-related (such as annual compliance, bookkeeping, financial insights and strategy), and help business owners make smarter decisions for their business and lifestyle through our responsive, friendly expertise. Book a call or get in touch to discuss how we can help your business.​