SMSF - Accountants Fees

Discussion in 'Accounting & Tax' started by Pumpkin, 27th Apr, 2021.

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  1. Pumpkin

    Pumpkin Well-Known Member

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    How is everyone being charged by their Accountants for doing the SMSF Returns?
    Not including Audit.

    We have a really tiny one and had 3 changes of Accountants in the past 10-years.
    The fees have increased significantly, and there is no room for negotiation, well, unless we change Firm which is the last last resort.

    In the good old days, dont they charge by hour?
    Say x hours by Grad Acct, Senior and Partner.
    How many hours is really required these days with bank feed and software?
     
  2. Paul@PAS

    Paul@PAS Tax, Accounting + SMSF + All things Property Tax Business Plus Member

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    It varies. No two smsfs are the same. You want a hourly fee it could be worse. What is the number of hours ? What is the rate ? I find that confuses clients and offer a fee that is largely fixed that avoids that issue. And each new person picking it up possibly means rework and costs to review.

    Its not unusual to be $1500-$5000. Do you provide signed investment strategy ? Pensions ? How many bank accounts ? Additional things like loans (no datafeed), depreciation etc Insurance premiums ? Issues ?

    I always remind people smsfs fees are unlike industry funds which charge a % fee that increases with balance (albeit with some taper off with large balances) SMSF fees tend to be capped and whether the fund has $400K of $2m it doesnt really impact fees. But a fund that assumes the data feed is enough is unlikely to be bottom budget. eg Commsec reports are terrible and any etf always involves extra work as does net rent and gross up and even accrual. Some clients have 20 commsec trades and others have a thousand. Small smsfs are often not economical with fees and the cost may even reflect as 2% of balances. IMO that a warning it might have been a wrong choice and later complaints about cost are a consequence. eg a $300K fund with a LRBF may well be $2200-$2650 plus audit. Or $1600.

    Its not uncommon that our time cost is more than the fee but due to competitive issues we often accept that. We arent going to match some of those bin diggers like esuper. They can only comete on lowest price and are welcome - Wonder how the India covid outbreak is affecting work ? I have had several clients leave and return and they appreciate what value we add.
     
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  3. Redwood

    Redwood Well-Known Member

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    If you have a tiny fund, not too much work assuming the accounting is using BGL/ Class, if you are no frills look at an online provider there is no shortage of them online and they will charge a set fee.

    If an accountants prepares you annual return this should generally include Financial Statements, Tax Return and an independent audit. The tax return should be lodged by the tax agent. This should be included in the fee and watch out for accountants that charge the audit fee separately. If you want support / advice - don't use an online provider.

    Cheers Ivan
     
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  4. Pumpkin

    Pumpkin Well-Known Member

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    Thanks for your responses.
    Yes we did provide investment strategy (separately charged), Actuarial. Audit fee is also separate.
    We download all bank transactions to Excel, whic is around one-page of 2 bank accounts.
    Depreciation Report was provided since the start.
    Looks like the minimum you mentioned is $1500. We are charged $2,500 just for the bookkeeping part/ Accountants.
    Oh did I mention they made mistakes with the Returns every year?
    It's a 60-page report and we have now learned that we must checked every page.
    One year the omitted my name from the beneficiary....
     
  5. Pumpkin

    Pumpkin Well-Known Member

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    Hmm, ours have a separate fee for everything: Audit, Investment Strategy, Actuarial....

    So far we have not have the need to ask for any advice; it's a very simple SMSF.
    And no doubt they tried to market that to us, and no doubt another hefty fee shall be paid for the service.

    Mind to share some Online Providers or how to search?
    Might need it in a couple of year's time when we are fully retired....
     
  6. Paul@PAS

    Paul@PAS Tax, Accounting + SMSF + All things Property Tax Business Plus Member

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    That is actually a preferred issue. It is NOT a concern. You can easily compare fees and charges cant you ? Bundled one -charge fees are misleading IMO. We always show actual costs for audit ($484), actuarial cert s ($99) investment strategy updates (by a law firm but ratified and affirmed in trustee resolutions at year end) and if the auditor does a title search we bill the actual disbursement once it is known. We dont bill time to facilitate a audit with our preferred auditor. A fixed price Melbourne speacialist CA. We also provide copies of all disbursement invoices and confirm we receive no fee share, kick backs etc. We also charge seperate fees for TBAR and pension doc updates etc specific to each issue so it is 100% transparent.

    There is also a hidden issue many dont realise. The accountant may use cloud software (BGL / Class) Who owns this ? Will they transfer this to another firm? We adopt the view this is trustee property and is required to be retained by them at least 10 years under super laws. We freely transfer to another firm. (rare we are asked !!) and also expect other firms follow this approach as it may be a matter a trustee can sue an accountant for (s55 SIS) . When we face opposition we issue a caution letter that we will recommend legal action to the fund and also make professional complaint to a professional body and it works everytime. We aso adopt the view all client docs remain their property and freely provide electronic copies of most records.
     
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  7. milkyjoe

    milkyjoe Well-Known Member

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    We charge anywhere from $2000 to $3500 including facilitating the audit. Actuary certificates are $110 on top.

    If you stick with an accounting firm you'll usually get to talk to them through the year and receive advice. Not many online administrators can provide that.
     
  8. JohnPropChat

    JohnPropChat Well-Known Member

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    No frills about $1k, mid range ones with basic advice included about $1500 with extra advice as required at $350/hr, mid to high ranges ones are $3k+ with a bit more included in the base advice.

    All of them will include financials and audit and meet compliance. If you have non trivial issue and/or complex planning then quality advice is a must. The trick is and has always been knowing when/where to cost cut and likewise when not to cheap out and pay top $ for great advice.

    If your affairs are simple then pick the no frills/no advice option and this will force you to get advice as and when needed but be prepared to pay $$$ as they are not your "regular" accountant.
     
  9. Paul@PAS

    Paul@PAS Tax, Accounting + SMSF + All things Property Tax Business Plus Member

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    Yes very good point. We also suport things like investmnet strategies, pension and other docs, pension resets, TBAR reporting, adhoc advice and general guidance, issues with deduction notices, letters for lenders etc. Most admin services add this as extra's. I think every one of our smsf clients asks at least 3-20 questions a year.

    Even I ask questions of other smsf advisers for mine !!
     
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  10. BennEznElle

    BennEznElle Well-Known Member

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    As mentioned, fees are varying, and will depend on complexity and often the amount of work involved is related to the level of buy in and communication from the client. If you can provide everything that is required in one hit, and respond to queries promptly and completely, that is a huge plus.

    A bottom fee of $1500 is pretty low and would be for a fairly straight forward fund, with cash listed shares, few trades etc. I would suggest per Paul's early comment, that most accounting firms write-off a lot on super funds in order to try and stay competitive. If we always charged the total cost to do a fund, we would probably lose a lot of clients. Unfortunately this isnt helped by the $990 online platforms, but I also think that in a lot of cases, trustees just don't comprehend the totality of the work involved.

    We always transfer BGL our BGL subscriptions out, and equally request it when taking on new clients. We recently took on a fund which is quite straight forward and the trustee has fantastic records, but it came from an accountant without a software. It probably cost us $4-$5k in time to set it up on our system as there were cost base resets on shares, poor pension history records etc and we effectively had to review the whole cost base of the entire share portfolio. That time just simply isn't recoverable from the client.
     
  11. Paul@PAS

    Paul@PAS Tax, Accounting + SMSF + All things Property Tax Business Plus Member

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    BGL do transfer setups for free. For professional accounting firms. Most recent was Class >BGL. Send BGL a support request for conversion and they provide guidance and you send them the financials after a simple file creation. Agree "bad accountant" transfers are a mess with CGT reconstruction and member elements often really wrong.

    We dont take on cheapo funds without a fee unless its a software migration. You cant have it both ways. I find many admin clients have very poor knowledge, compliance and question why a investment strategy is required.I cant match those prices. I am wary of peple who chase low fees that are not viable.
     
  12. milkyjoe

    milkyjoe Well-Known Member

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    Yes, and questions re: tax payments is a big one with my clients! I would email/chat to my SMSF trustees many times throughout the year.