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“A letter from your accountant” and the race to the bottom in accountancy

  • 24-10-2019 11:38pm
    #1
    v638sg7k1a92bx
    Closed Accounts Posts: 2,913 ✭✭✭


    After 7 years away I cane back to Ireland recently and back working in the family practice. I’m not a qualified accountant but worked in the family practice before I left and for a practice in NZ for 2 years so I have reasonable amount of experience in the industry.

    One observation I notice since I came back is that accountants in Ireland seem to be doing a lot of work for clients for free. For example, I’ve been back less than a year and the amount of clients asking for “a letter from the accountant” which appears to be provided for free! In NZ they are ruthless with their fees, anything outside of the engagement letter and bang it’s extra fees.

    I was at a networking event in the midlands where were based and from speaking to other accountants it seems to the same. Since I’ve been back, the amount of email I field for my brother which are constant requests for letters, tax clearance, when is my tax return due, I need a letter for the bank. But it’s not just standard letters for the bank, brokers are looking for letters confirming what the sales will be in three years time. I don’t understand how accountants are providing these extra services for free? I asked my brother and he said that if he charges then clients will go somewhere else.

    Is this the same for practices in Dublin?


Comments

  • #2
    duffysfarm
    Registered Users Posts: 845 ✭✭✭duffysfarm


    reminds me of a post that i seen somewhere else on boards where someone went in to ask their accountant to do something which could have been signed by the solicitor or accountant and the accountant asked the client why they didnt get the solicitor to sign it and the client said "sure he would only charge me to do it......"

    i agree with you that accountants are going work that they should charge for - when you look at solicitors or doctors they charge for everything. I think that since the last recession people have been doing more work for less and people are expecting that now. Did New Zealand have a recession and if not maybe they didnt have to offer more for less?


  • #3
    v638sg7k1a92bx
    Closed Accounts Posts: 2,913 ✭✭✭v638sg7k1a92bx


    duffysfarm wrote: »
    reminds me of a post that i seen somewhere else on boards where someone went in to ask their accountant to do something which could have been signed by the solicitor or accountant and the accountant asked the client why they didnt get the solicitor to sign it and the client said "sure he would only charge me to do it......"

    i agree with you that accountants are going work that they should charge for - when you look at solicitors or doctors they charge for everything. I think that since the last recession people have been doing more work for less and people are expecting that now. Did New Zealand have a recession and if not maybe they didnt have to offer more for less?

    Not while I was there


  • #4
    thegolfer
    Registered Users Posts: 346 ✭✭thegolfer


    Merrick Mango Stinger wrote: »
    Not while I was there

    It's rampant in small practice. Worked myself in a small firm and there were plenty of requests like that and more. Mentally of the client and partner's developed this culture.

    The reality is that a lot more people require small tax returns either rental income, or small business, while larger business gravitates towards bigger firms, leaving the small firm to mop up some of this work.


  • #5
    Jim2007
    Moderators, Business & Finance Moderators Posts: 9,981 Mod ✭✭✭✭Jim2007


    thegolfer wrote: »
    It's rampant in small practice. Worked myself in a small firm and there were plenty of requests like that and more. Mentally of the client and partner's developed this culture.

    Clients looking for free stuff is nothing new for heavens sakes, they were at it 35 years ago when I was on the job.

    Only once ever have I had a client tell me we were charging to little and that was an office politics thing. He wanted to use the conclusion of a consulting report to recommend a course of action to his board, but felt the advice was too cheap to be taken seriously! So some extra analysis and commentary was added to the report and the price went from 5k to 25k and we had a very happy client.


  • #6
    v638sg7k1a92bx
    Closed Accounts Posts: 2,913 ✭✭✭v638sg7k1a92bx


    Jim2007 wrote: »
    Clients looking for free stuff is nothing new for heavens sakes, they were at it 35 years ago when I was on the job.

    Only once ever have I had a client tell me we were charging to little and that was an office politics thing. He wanted to use the conclusion of a consulting report to recommend a course of action to his board, but felt the advice was too cheap to be taken seriously! So some extra analysis and commentary was added to the report and the price went from 5k to 25k and we had a very happy client.

    You can't blame the client if accountants are providing free services. The perception is that when it comes to business and finance an accountant is the gold standard when it's the exact opposite. Accountants that I work for (including my family) don't know how to run businesses efficiently starting with their own.

    For example, how do you price an audit?


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  • #7
    searunner
    Registered Users Posts: 64 ✭✭searunner


    Merrick Mango Stinger wrote: »
    After 7 years away I cane back to Ireland recently and back working in the family practice. I’m not a qualified accountant but worked in the family practice before I left and for a practice in NZ for 2 years so I have reasonable amount of experience in the industry.

    One observation I notice since I came back is that accountants in Ireland seem to be doing a lot of work for clients for free. For example, I’ve been back less than a year and the amount of clients asking for “a letter from the accountant” which appears to be provided for free! In NZ they are ruthless with their fees, anything outside of the engagement letter and bang it’s extra fees.

    I was at a networking event in the midlands where were based and from speaking to other accountants it seems to the same. Since I’ve been back, the amount of email I field for my brother which are constant requests for letters, tax clearance, when is my tax return due, I need a letter for the bank. But it’s not just standard letters for the bank, brokers are looking for letters confirming what the sales will be in three years time. I don’t understand how accountants are providing these extra services for free? I asked my brother and he said that if he charges then clients will go somewhere else.

    Is this the same for practices in Dublin?

    Not sure about practises in Dublin, but in the west, it is the same, clients are happy to ask for things but it is up to the accountant to start thinking of their practise as a business and not a customer service help desk.


  • #8
    v638sg7k1a92bx
    Closed Accounts Posts: 2,913 ✭✭✭v638sg7k1a92bx


    searunner wrote: »
    Not sure about practises in Dublin, but in the west, it is the same, clients are happy to ask for things but it is up to the accountant to start thinking of their practise as a business and not a customer service help desk.

    I think a big part of the issue is that accountants have always been all things to all people and have been too close to their clients. Have a complex VAT question? No problem we can do that. Inheritance tax? No problem we'll look after it. Transfer sole trader to a company? Same again. All of this for a minor increase, if ant increase, in the annual fee.


  • #9
    marieholmfan
    Registered Users Posts: 2,744 ✭✭✭marieholmfan


    Merrick Mango Stinger wrote: »
    I think a big part of the issue is that accountants have always been all things to all people and have been too close to their clients. Have a complex VAT question? No problem we can do that. Inheritance tax? No problem we'll look after it. Transfer sole trader to a company? Same again. All of this for a minor increase, if ant increase, in the annual fee.
    But if you can't do those things without much difficulty why am I paying you anything at all?

    I don't want an accountant who finds any of that difficult.


  • #10
    v638sg7k1a92bx
    Closed Accounts Posts: 2,913 ✭✭✭v638sg7k1a92bx


    marieholmfan wrote: »
    But if you can't do those things without much difficulty why am I paying you anything at all?

    I don't want an accountant who finds any of that difficult.

    Because you’re not paying for those things.


  • #11
    marieholmfan
    Registered Users Posts: 2,744 ✭✭✭marieholmfan


    Merrick Mango Stinger wrote: »
    Because you’re not paying for those things.
    If you can't do those things I don't want you to do anything for me at all.
    That stuff should all be instantly available to you because you are paid for two things:
    To be an expert
    To be well organised


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  • #12
    v638sg7k1a92bx
    Closed Accounts Posts: 2,913 ✭✭✭v638sg7k1a92bx


    marieholmfan wrote: »
    If you can't do those things I don't want you to do anything for me at all.
    That stuff should all be instantly available to you because you are paid for two things:
    To be an expert
    To be well organised

    Wrong. For several reasons. Not all “those things” can be done by a general accountant. Accounting and tax have very specialised areas just like other professions. VAT is a speciality in its own right, so is insolvency, income tax and corporation tax. There are accountants who can do those things but you probably aren’t paying your accountant to do those things, most likely you pay an annual fee and then “those things” are extra which people expect to be done as part of the annual fee.


  • #13
    searunner
    Registered Users Posts: 64 ✭✭searunner


    Merrick Mango Stinger wrote: »
    Wrong. For several reasons. Not all “those things” can be done by a general accountant. Accounting and tax have very specialised areas just like other professions. VAT is a speciality in its own right, so is insolvency, income tax and corporation tax. There are accountants who can do those things but you probably aren’t paying your accountant to do those things, most likely you pay an annual fee and then “those things” are extra which people expect to be done as part of the annual fee.

    I agree,


    Perceptions are, I paid a entry free, there must be a free bar!


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