The recent changes in the business world in the UAE, particularly the introduction in VAT, has seen significantly increased demand for accountancy services. Until recently, many small and medium businesses may not have had their financial statements professionally compiled or audited whereas newer regulations have made this a necessity rather than something that was done for a secondary purpose (applying for financing for example).
This has, in turn lead to many more business owners and senior managers needing to ask how much these services will cost, and, as is often the case, there isn’t a simple answer.
Rather than try and pick an arbitrary number out of thin air, this article aims to highlight the factors that will impact the cost of accounting and bookkeeping services to help you when making the decision that fits your organisation.
The Scope of Work:
Perhaps the most obvious consideration relates to what type of accountancy you need to be taken care of. This might be registering your company with the FTA for VAT or filing a VAT return. It could be a far broader requirement such as accounting consultancy or even full time bookkeeping. This might be an in house dedicated service or, as is often more appropriate and financially viable, outsource bookkeeping. To make sure you get the quality of service you require, have a look at testimonials and client comments and consider who your competitors and clients are using for their accounting needs. Most importantly, check that the potential accounting service you are considering is experienced and qualified to handle the type of service you will be paying for.
The Scale of Work:
It goes without saying that handling the books of a multinational corporation is going to have a different cost associated than looking after the accounts of a sole proprietor. Also consider the complexity of the industry you are involved in. Large scale construction with multiple sub-contractors and projects spanning multiple financial years are going to have complicated requirements. They may have phased payments agreements and trigger milestones that will require extensive if not specific specialist skills and experience compared to a retail outlet for example. One may require a full time team of accountants whereas the other may need part time assistance for which the costs are going to be relative.
Should the gross turnover alone be a factor in determining the cost of accountancy services? This is an interesting question on the surface. It may appear that the amount of chargeable work is the same for an organisation turning over $100 million with 100 transactions compared to another turning over $1 million from 100 transactions. In reality, this is not usually the case and higher gross numbers, more often than not, will demand a higher fee. There will be different levels of responsibility and risk involved and making sure your chosen accounting professionals have the relevant experience and confidence with high value transactions is going to be vital for your own peace of mind.
Employee or Outsource:
This is one area where you are likely to see significant variation in costs. Having an in-house accountant will incur a salary relative to the experience and skills of the employee. Add to that visa costs, medical insurance and holiday cover and you will have a fixed and determined cost. Outsourcing, provided you have selected the right partner, is likely to represent a lower overall cost almost by default. Consider also that you may well have a team working on your accounts with broader skillsets and combined experience. You could well be getting considerably more bang for your buck if paying for the time they are dedicated to your books rather than for a full working day, week, month or year.
So How Much?
When push comes to shove, you are going to get broadly what you pay for and cheap is rarely the best and the best is rarely cheap. The important thing to ensure is that you are getting great value and the best service for the cost.
Why not speak to the team at Affinax and let them guide you on what services they can provide and how much value they can deliver for you.