Hi there, finance readers!
There comes a point in life when a little voice goes off inside your head: ‘Maybe I need to get an accountant?’ Perhaps you’ve just started a new business and are anxious about taxes. Maybe you have bought some rental properties and want to make sure that you are meeting your tax obligations. Or you may have just moved from overseas and are trying to figure out the tax system of your new home.
Whatever the reason is, as an accountant, I’m here to write to you today about what you need to know before seeing an accountant!
First of all, you may want to work out what exactly it is that you need. There are some overlaps between the above three roles. Many accounting firms will offer all three services (like our firm, SH Advisory). But it is important to make sure that the accountant you are talking to provides the service that you actually need.
A bookkeeper is an accounts clerk. They will keep your accounts tidy and manage your accounting software for you. Some bookkeepers provide administrative services, like managing your accounts receivable or accounts payable. Some bookkeepers may also provide more advanced services like payroll or payment processing.
However, bookkeepers are not accountants. They are not qualified to provide tax advice and can’t really help you with financial planning. They are good for repetitive tasks that you don’t really want to do.
Simply put, a tax agent is someone who can file taxes for you. Most of the time, a tax agent will be an accountant. But not all tax agents are accountants. Tax agents can also talk to the tax authorities on your behalf. So if you’re looking for someone to help you deal with the tax department, you want a tax agent!
Most accountants are salaried employees working for organisations, performing specific financial functions for them. They provide financial advice, ensure that tax obligations are met and prepare financial reports. Larger organisations will usually have an accounting department staffed by several individuals to do this for them.
But if you are a small business owner, you can’t afford an accounting department! So that’s where you look for a public practice accountant. These are independent accounting firms that provide accounting services to small businesses.
A public practice accountant will provide for you:
In general, that is what an accountant will do.
If you are starting a new business, you will likely want an accountant. A bookkeeper is useful if you can’t keep up with the daily reconciliations of your business accounts. If you can manage the accounting software yourself, you don’t really need a bookkeeper.
An accountant will help answer all the tax and financial questions you have about starting a new business. Ideally, you want to find an accountant who is also a tax agent, as having them file your taxes is super convenient. If your accountant provides bookkeeping services as well, then you don’t need a separate bookkeeper. Score!
Okay, let’s start with the biggest myth of them all:
Yes, I am actively disparaging my own profession here. But let’s talk about why you don’t need an accountant when starting up.
When starting your business, you are focused on two things: building brand awareness and making sales. You don’t have a lot of funds to spend, so you focus your efforts on those two things. Basic profit and loss cash book accounting is very easy to do by yourself. Using financial applications like PocketSmith makes accounting for your small business very easy.
When it comes to tax time, you just have to calculate the income and subtract the expenses, and voilà, you get your tax payable!
While it is true that you may not need an accountant when starting up a business, you may find yourself in a position of needing one eventually.
This brings us to our next myth:
As a business owner, we wear many hats. We are CEO, CMO, COO, CFO, bookkeeper, administrator, and employee all in one. It is exhausting! Most of our time will be spent in operations, working hard to produce the output to make our business run. Looking at the business financial results can be a lot like looking at your report card at the end of the school term. No one likes doing that.
There will come a time when you find that managing your business’ tax and finances becomes overwhelming. It keeps you up at night. It fills you with dread. Looking at a tax return gives you feelings of revulsion and disgust. You get the point.
And that’s exactly when you need an accountant. You see, while the act of filing taxes is quite simple, the art of dealing with the tax department, making the correct deductions and keeping track of your business finances is actually quite complicated. You can get away with self-filing for the first year (and maybe the second year) of business. Usually, any thriving business will definitely need an accountant by the third year.
A lot of our clients join us towards the end of their first year or at the start of their second year in business. So I can say that from experience, it is usually around that time that you will need an accountant.
Your accountant is more than just your number cruncher, which brings us to our last myth to debunk:
I mean… It’s part of what we do. And it certainly is the main reason why a lot of clients come to see us. But it is not the reason why they choose to stay with us. If I had to describe my job in two words, it would have to be:
‘Financial Counsellor’
80% of the time, clients will see me because they want to talk about their financial anxiety. They want help in paying less taxes (legally, of course!). They need assistance with obtaining loans. There are doubts in their mind about their business. They have an illness in the family, and they need help talking to the tax department to reduce their tax bill.
The actual tax work that we do takes up a lot less of our chargeable hours than you might think. Most of it is spent communicating with clients and making sure their finances are tidy. And I’ll let you in on a little secret: The tax work we do? It’s all 80% automated, so we don’t actually spend a whole lot of time doing it. The real value of an accountant comes in their ability to talk you through your business anxiety, offer you solutions and give you good advice on how to run your business.
And dealing with the tax department for you. Because no one likes doing that.
Different accounting firms offer slightly differing services. This may also vary depending on the jurisdiction you are in, where there are different classes of accountants/tax agents that do different things. The list of things I am providing here will just give you a general overview of what you can expect from your accountant.
The boring stuff. The timely filing of your tax returns and GST returns (if you have any to file). At the very least, your accountant should be filing your tax returns for you. You send them your financial information, and they will send you a message once it has been filed, telling you how much to pay and when to pay it by.
A good accounting firm will send you reminders if you are overdue or are close to being overdue on your tax payments. An average accounting firm will file it, and you’ll never hear from them until the next tax period.
The anxiety-inducing report card. Part of calculating your tax return involves creating financial reports. So most, if not all, accounting firms will provide financial reporting as part of their tax compliance work. Be wary of accounting firms that charge extra to do this. It really should be part and parcel of tax compliance work.
Based on the financial information that you’ve provided to your accountant, they will put together a financial report for you. You can make it easier for your accountant by giving them advisor-level access to your accounting software, like PocketSmith, if you have one.
Financial reports typically consist of a yearly profit and loss statement (which shows how much sales, expenses and profit you have) and a balance sheet (which keeps track of your assets, liabilities and equity). Some financial reports may have a cash flow statement (which shows how you spent your cash during the year). Financial reports are helpful for keeping track of your business performance. Also, banks love these things. You’ll never get a loan from the bank without providing them with financial statements.
A good accounting firm will send you regular updates on your business’ financial situation. An average accounting firm will send you an end-of-year financial report, and you’ll only hear from them again next year.
For the most part, your accountant should be responsible for talking to the tax authorities on your behalf. These are some of the things your accountant should be able to do for you:
In saying that, there are some things that accountants cannot do for you, these include:
As mentioned earlier, a lot of my work entails listening to my clients and giving them good tax and financial advice. Your accountant should always be available to talk. At the very least, they should reply to your emails in a timely manner. An accountant will answer any questions you have about tax and finances to the best of their ability.
Some accountants may charge extra for time spent talking on the phone or for lines written in an email. If your accountant is like this, you may want to check with them first before asking them questions that you’re not ready to pay for. In saying that, there are a lot of accountants out there who don’t charge by the line/minute for simple tax questions.
However, if you are asking for specific financial advice (e.g. financial planning for the acquisition of a new business), it is quite normal for accountants to apply an hourly consulting rate for that sort of work. Most accountants will state this price up front before you commit to it. Be wary of the sneaky ones who send you surprise bills!
This is typically an add-on service, separate from the above-mentioned services. Accountants see a lot of businesses come and go. So we have a good idea of what makes businesses successful. A lot of accounting firms, just like ours, are moving into the financial advisory service.
We will take a look at your overall finances and help build forecasts and budgets that you can use to track your business growth. Some accounting firms offer regular catch-ups to check on your business growth and offer advice on any plans that you have for running your business.
Most accountants will provide this service. If they don’t, then they need to catch up with the times, as this is the direction the accounting industry is heading!
Ah, the million-dollar question. I’ll be sharing my pricing experience based on the New Zealand market, but you may find some good ideas here even if you live elsewhere. To keep it simple, use this general rule of thumb:
‘If your accountant is charging you more than 3% of your total annual sales per year, then you’re probably paying them too much.’
For example, Abdul has a business that turned over $100,000 last financial year. His accountant charges him $5,000 (before GST, if it applies) to prepare his financial statements and file his taxes. $5,000 is 5% of $100,000 — this is kind of a lot for Abdul to pay.
Remember that we are looking at sales, not profit. Sales are the top-line figure before expenses. Your sales are generally a good indication of how large/complex your business is. If your accounting fees amount to more than 3% of your annual sales, your accountant is probably overcharging you, or you need to shift to a cheaper package.
Of course, there are exceptions to this rule. If you are starting out and decide that you want to use an accountant, you can expect to pay between $500-$1,000 a year for just basic professional accounting services, which can easily go over the 3% mark if your annual sales are only $10,000.
Be wary of accountants who charge per return filed if you are GST registered. This can cause your accounting bill to rack up very quickly as the market rate for returns filed varies between $200-$300. So if you’re filing six GST returns in a year at $300 per return, that is an additional $1,800 a year on top of what you’re being charged for tax compliance and financial reporting. Personally, I think GST returns should be included in the basic compliance package.
Most accountants won’t offer bookkeeping services. Most bookkeepers charge between $30-$50 an hour for bookkeeping work. Remember that bookkeeping can vary from simple coding of your accounting software all the way to managing your accounts receivable and accounts payable.
For services on the simpler end, $30 an hour is plenty (as of 2025). On the more complex side of things (Accounts Receivable, Accounts payable, payroll, etc.), this can reach $50 or even $60 an hour.
Please note that some accountants don’t do payroll and PAYE taxes for their clients. We prefer clients to handle their own payroll obligations. You can expect to be charged $200-$400 a pay run (depending on the size of your workforce) if you want your accountant/bookkeeper to manage your payroll. Seriously, just use payroll software. It’s much cheaper.
Consulting charge-out rates for accountants vary depending on their qualifications and level of experience. A senior ranking partner in a Big Four accounting firm may charge you $600 an hour, whereas a junior accountant may cost only $200 an hour. Consulting rates also vary based on the type of advice given. Legal tax advice typically costs more than just basic advice about tax payments.
In general, expect to pay upwards of $300 an hour for quality advice/consulting work from your accountant. In most cases, you will likely want to just work with the accountant who is already doing your compliance work. Sometimes you may want to specifically work with a different accountant because of their specialities.
Getting an accountant is a big step! So congratulations on thinking about seeing one. I may be biased in saying this, but getting a good accountant is crucial to building long-term business (or investing) success.
I hope that I have given you a good idea of what to expect when dealing with an accountant. It is always a good idea to shop around before committing to an accountant. At the end of the day, you want to have an accountant who is responsive, understanding, and fully committed to seeing you meet your financial goals.
Sam is the director of SH Advisory, an online accounting firm for small businesses and startups in NZ. He is also the creator of The Comic Accountant, an internationally-read finance comic blog. With 15 years experience in accounting and finance, he loves sharing quality financial advice with small business owners everywhere. In his spare time, he likes to nerd out over the latest board game launches and great PC gaming deals online. If you need help with your small business and startup, Sam is the person you want to talk to!
