Like many small business owners, you hire a CPA and probably consider their accounting fees “average.” It is important that you consider what you get for your money. Before looking at options to lower your accounting fees, compare the value you’re getting from your accountant.

Consider the following two examples:

Example 1: Your accountant prepares monthly management accounts for you, as well as year-end tax returns, etc. and charges you $3,500 for the entire year. During that time, they provide you with regular business advice and advice on how to legally reduce taxes (through an online newsletter like we do). He gladly adopts some of the advice and sees a dramatic improvement in his business. And now you work less and fish more!

Scenario 2: The only time you talk to your accountant is at tax time, and your accounting fee is $1,750. He does not receive monthly management accounts to identify early warning signs and does not receive any type of advice.

Would you choose accountant 1 or accountant 2? Which will provide you with more value?

Business owners often seek my advice on how they can receive a value-added service from their accountant. Here are some of my tips:

* Ask them to show you a way to organize your accounting records and if they recommend suitable accounting software.

* Most bookkeepers charge an hourly rate (rather than flat rates), so if they need to call you for a missing bank statement or payroll statement, you’ll be charged more. Keep your bank records, deposit books, check stubs, and bills neat and in some sort of order.

* Do not over complicate your needs. Often, you will only need a set of basic financial statements. Clients regularly tell us to code hundreds of transactions into dozens of separate account transaction codes. This additional work adds to bookkeeping fees and is often unnecessary for most small businesses.

* Separate your personal and business expenses. Open a new account with your bank and pay all business expenses on that account as much as possible. Many people forget about cash expenses for the business and then forget to claim them. Try to remember to save your receipts and write on each one a brief description of what you spent your cash on. Think about adding to your payroll, rather than taking irregular cash withdrawals.

* It’s okay if you hate bookkeeping: hire someone to do your bookkeeping. Hire a part-time worker or see if your accountant has bookkeeping staff. Your accountant will likely have junior accounting staff who can help you, and their fees will be less than senior accounting staff. You should find that they will be able to do the job faster and better than you, ultimately saving you time and money.

* Before making any big business or investment decisions, check with your accountant first. Ill-considered business decisions that affect the financial performance of your business can be very costly to rectify after they’ve been made.

File your GST and PAYE statements early or, if you’re falling behind, your accountant should be able to negotiate a payment plan for you.

* Talk to your accountant every few months to establish feedback on the performance of your business. You don’t need me to tell you that your business is too important to ignore early warning signs and proven business methods.

You may see a “cheaper” accountant as a short-term solution, but the long-term consequences can often be overlooked. If you just want to do numerical calculations, there are many counters available to help you. But you should view your accounting fees as a major investment.

If it’s value for money you’re looking for, I hope you’ll use these tips to make sure your CPA does more than just count beans.