Accountancy quotes are really high?

FutureGuy

Hi all,
LLC in the process is being formed and I’ve been looking at quotes for accountants. It’s an e-commerce store.

It’s just myself so just need the basic accounting done. Two quotes already and both have come in at over €3,000 plus VAT. Includes Form 11, CT1 return, Limited Company Accounts, year end and 36 hours book keeping.

Can anyone help me here. I was advised to look at putting aside 1,000 for the first year.

Gloomtastic!

No payroll or VAT returns? What’s your estimated turnover for year one?

FutureGuy

Gloomtastic! wrote: »

No payroll or VAT returns? What’s your estimated turnover for year one?

approx 80-100k. Mainly UK-based.

Who advised you €1,000?

How are you recording your accounts and will you need 36 hours of bookkeeping done by a qualified accountant?

Be more specific about what your business will do and the number of transactions you expect to do to generate €100k.

gudede

FutureGuy wrote: »

Hi all,
LLC in the process is being formed and I’ve been looking at quotes for accountants. It’s an e-commerce store.

It’s just myself so just need the basic accounting done. Two quotes already and both have come in at over €3,000 plus VAT. Includes Form 11, CT1 return, Limited Company Accounts, year end and 36 hours book keeping.

Can anyone help me here. I was advised to look at putting aside 1,000 for the first year.

€1,000 would not do that work. A cowboy would do it but been an e-store, you will have various queries around the new VAT rules which start on 1st July so wouldn’t recommend it.

An electrician would charge €150 per hour minimum, but someone advised you that an accountant would do over 40 hours work for €1,000.

I’m happy to give you a quote. I’m Cork based.

FutureGuy

gudede wrote: »

€1,000 would not do that work. A cowboy would do it but been an e-store, you will have various queries around the new VAT rules which start on 1st July so wouldn’t recommend it.

An electrician would charge €150 per hour minimum, but someone advised you that an accountant would do over 40 hours work for €1,000.

I’m happy to give you a quote. I’m Cork based.

Thanks for the reply.

The person advising is a business consultant working with a number of startups including e-commerce so I must be missing something.

The list of work above is what was quoted to me as what I would need, not what I have asked for specifically. If there are some basic things I can do myself to save money, I will. I just want the bare minimum to get me started.

The July changes to EU vat are definitely worth of scrutiny. I’m hoping to launch in August so the dust will have settled somewhat.

So you can do the bookkeeping once you have an accountancy package set up. It's not complicated stuff but will take a good bit of time to get the hang of it and make sure you are doing it right. Do you have the time to dedicate to this alongside setting up and running your business.

How many transactions do you expect to do in year 1?

Your business consultant sounds like they are giving some half baked advice to a class of would be entrepreneurs and not tailored to your situation at all. Are you paying them a consultancy fee?

Jim2007

FutureGuy wrote: »

The person advising is a business consultant working with a number of startups including e-commerce so I must be missing something.

A good consultant for a start…. Anyone can call themselves a business consultant particularly in the world of startups where most clients wouldn’t the difference between a good one and a bad one.

Provision of accounting fees is a fairly basic one to get wrong…. So be careful who you rely on.

Triangle

Jim2007 wrote: »

A good consultant for a start…. Anyone can call themselves a business consultant particularly in the world of startups where most clients wouldn’t the difference between a good one and a bad one.

Provision of accounting fees is a fairly basic one to get wrong…. So be careful who you rely on.

Edit: not '100% on this' thought they were saying a good accountant. You can't spend enough on a good accountant imo!
My ex used a cowboy for her startup (used my name as a director) nad it's cost me thousands to get sorted as they both messed up.
Make sure it's a reliable accountant!!

And my own company pays around the same each year (3000 + vat) for audited accounts, payroll for 11 and filings (we're a financial company so more regulations)

FutureGuy

whatnow! wrote: »

So you can do the bookkeeping once you have an accountancy package set up. It's not complicated stuff but will take a good bit of time to get the hang of it and make sure you are doing it right. Do you have the time to dedicate to this alongside setting up and running your business.

How many transactions do you expect to do in year 1?

Your business consultant sounds like they are giving some half baked advice to a class of would be entrepreneurs and not tailored to your situation at all. Are you paying them a consultancy fee?

Around 6,000-7,000

It’s free mentoring from The Local Entrerprise Office (the person owns his own consultancy) but the only thing we discussed regarding the accountancy part is the price. Obviously I want to have a competent person doing the books. :-)

I believe those LEO mentors are volunteering their time and they range from being decent to being completely woeful.

I reckon your one throws out the €1,000 figure to everyone regardless of their specific circumstances. He probably says the same to someone setting up a dog walking service.

€3,000 is the minimum you are going to be paying for someone reliable for that amount of work.

Are you coding the website entirely yourself or using WordPress?

gudede

Who set the company up for you?? Or is it set up??

Triangle

whatnow! wrote: »

I believe those LEO mentors are volunteering their time and they range from being decent to being completely woeful.

I reckon your one throws out the €1,000 figure to everyone regardless of their specific circumstances. He probably says the same to someone setting up a dog walking service.

€3,000 is the minimum you are going to be paying for someone reliable for that amount of work.

Are you coding the website entirely yourself or using WordPress?

3000 is crazy for a start up. We have a well established business with 11 employees, a high turnover and pay this (3000 + vat).
For a startup (year one) , it should be significantly lower.

Triangle

Triangle wrote: »

3000 is crazy for a start up. We have a well established business with 11 employees, a high turnover and pay this (3000 + vat).
For a startup (year one) , it should be significantly lower.

Are they doing your bookkeeping?

That is the bulk of the work required by the OP who is expecting about 7,000 transactions in year 1.

Triangle

whatnow! wrote: »

Are they doing your bookkeeping?

That is the bulk of the work required by the OP who is expecting about 7,000 transactions in year 1.

They do reconciliation of 5 bank accounts, payroll for 11 and annual audits.
Saying that, I generate a lot of reports that might make things easier. But the software available nowadays for venders has most if not everything needed built in)
We're a CBI regulated firm, so have more regulations that a standard firm.

Bank recs are very quick to do and if they are not doing the bookkeeping for you there is someone in your company probably doing monthly bank recs and correcting errors as they go. Payroll doesn't change much and is generally just a quick rerun of the previous month with the odd adjustment and it sounds like your using a good accountancy package which makes the year end accounts fairly quick to produce.

You are comparing your €3k to the OP €3k when he requires a lot more bookkeeping which is more time consuming.

FutureGuy

gudede wrote: »

Who set the company up for you?? Or is it set up??

A company called companysetup in Dublin.

FutureGuy

whatnow! wrote: »

I believe those LEO mentors are volunteering their time and they range from being decent to being completely woeful.

I reckon your one throws out the €1,000 figure to everyone regardless of their specific circumstances. He probably says the same to someone setting up a dog walking service.

€3,000 is the minimum you are going to be paying for someone reliable for that amount of work.

Are you coding the website entirely yourself or using WordPress?

It’s a shopify store with a paid theme. I know some basic coding myself.

FutureGuy

I will happily put my hand up and say I clearly need to know more about the accounting side of things. This is my first business and I was just going to hand over the accounting piece. The thing is I have no idea what the accountant needs to do for me.

CIARAN_BOYLE

FutureGuy wrote: »

I will happily put my hand up and say I clearly need to know more about the accounting side of things. This is my first business and I was just going to hand over the accounting piece. The thing is I have no idea what the accountant needs to do for me.

I'd say a half to two thirds of the cost is probably in 36 hours bookkeeping.

Talk to your business consultant since you have one and talk to an accountant about how you could record that yourself.

I wish you luck.

It seems like your average order value to mainly UK based customers will be under €15 Inc VAT and if you hit your target of 7,000 transactions in a one person operation where you are getting the actual product, packaging it and posting, dealing with customer inquiries, handling admin tasks, paying accountants, dealing with returns, ect then you will make less money per hour than someone working in McDonald's and that is if you hit your 7,000 transactions target.

If you don't mind me asking what are you selling?

FutureGuy

whatnow! wrote: »

I wish you luck.

It seems like your average order value to mainly UK based customers will be under €15 Inc VAT and if you hit your target of 7,000 transactions in a one person operation where you are getting the actual product, packaging it and posting, dealing with customer inquiries, handling admin tasks, paying accountants, dealing with returns, ect then you will make less money per hour than someone working in McDonald's and that is if you hit your 7,000 transactions target.

If you don't mind me asking what are you selling?

Clothing.

My logistics for UK customers is UK based. My European customers are serviced from Europe. Same set up for US. I’m not fulfilling directly as projuxts are print on demand.

Costs include registered post. My average order value is expected to be about £38. I have my returns set up and don’t expect many as I have a ton of product research done to select the best quality and any returns will be paid for by my fulfillment agencies. I’ve spent about 1,500 on samples from multiple providers.

Ah so you are not doing 7,000 transactions, you are doing maybe 100 as you are probably getting paid monthly directly from the fulfillment agency. That is a totally different story.

Why did you choose to set up as a limited company instead of a sole trader? Why do you need limited liability and all the added admin that comes with that?

FutureGuy

whatnow! wrote: »

Ah so you are not doing 7,000 transactions, you are doing maybe 100 as you are probably getting paid monthly directly from the fulfillment agency. That is a totally different story.

Why did you choose to set up as a limited company instead of a sole trader? Why do you need limited liability and all the added admin that comes with that?

I have a number of business ideas that I’ll be fleshing out. Different areas so best to have that covered as an LLC.

You can start off as a sole trader with a business name for about €20 and incorporate later quite easily when it becomes the right move for you. You are not really taking any any risk with this dropshipping print on demand business model. In the short term your accountant fees for what you have described will decrease so that is one major plus.

Grab a copy of bookkeeping for dummies to get a better understanding as once you flesh out those other ideas you will need a much better understanding of your business financials.


Best of luck with everything.

Also LLC is an American term. You are talking about a company limited by shares and you will need to have a company secretary who can't be you (this is not the person sitting at the reception desk). That is an extra cost to have your accountant do this for you. You really need to have a good think about not operating as a sole trader as it seems you are really unaware of the difference in cost and admin between the two. Instead of asking the accountant to quote you for accountancy services maybe ask to meet them for an hour or two and have a chat about how you should proceed and pay the couple of hundred for this as you seem to be racing off with company formation companies in Dublin when the accountant can do this for you just as easily.

Trojan

whatnow! wrote: »

I believe those LEO mentors are volunteering their time and they range from being decent to being completely woeful.

The standard LEO mentoring rate is €58.33/hr (EI mentors get a higher rate). Travel & admin (writing the mentor reports) bring the effective rate down by 10-30%. The best folks won't stick around at that rate though.

I agree with your assessment, though I think that more are towards the decent end of the spectrum than woeful.

Source: I was a LEO mentor for ~9 years

FutureGuy

Thanks to everyone for the feedback.

Spent the last two days understanding my responsibilities in this area. I basically didn't know what I didn't know.

I Will hand the accounting over for the first 18-24 months to focus on growing my business but will use that time to further understand everything in real-time.

Gloomtastic!

FutureGuy wrote: »

Thanks to everyone for the feedback.

Spent the last two days understanding my responsibilities in this area. I basically didn't know what I didn't know.

I Will hand the accounting over for the first 18-24 months to focus on growing my business but will use that time to further understand everything in real-time.

Handing off your accounts is all well and good but you need to keep on top of the figures - they tell you how your business is doing. You might be busy, working 20 hours a day but are you making money each month and if not, how much money are you losing?

I would also recommend starting off as a sole trader, it keeps your costs to a minimum. The only reason you need a ltd company is to protect yourself if things go wrong. If you’re adequately insured, what’s the worst that can happen to you financially?

Here’s a link to a copy of the Accounts Package Spreadsheet I use as a sole trader. It’s easy to use and the explanations are in the notes.
https://www.dropbox.com/scl/fi/gfbrx9l1vqnjxaoelpbfe/Accounts-Template-with-VAT.xls?dl=0&rlkey=b6hm8vkvs9zr83c2aakmuvlt

If you do hand over your accounts, you will be looking for the same info from your accountant. If you don’t get it, change accountant.

niallb

Gloomtastic! wrote: »

...
Here’s a link to a copy of the Accounts Package Spreadsheet I use as a sole trader. It’s easy to use and the explanations are in the notes.
https://www.dropbox.com/scl/fi/gfbrx9l1vqnjxaoelpbfe/Accounts-Template-with-VAT.xls?dl=0&rlkey=b6hm8vkvs9zr83c2aakmuvlt

...

Sorry Gloomtastic. Interested in seeing that too. Good topic.

I sent you a request to view when it popped up.

Gloomtastic!

niallb wrote: »

Sorry Gloomtastic. Interested in seeing that too. Good topic.

I sent you a request to view when it popped up.

Done!