Tax Question:
Why do accounting fees vary year to year?
Facts:
As with many costs, the fees for preparing the year end financial statements and tax return can vary considerably and generally increases more often than they decrease. There is a misconception in the market place that since the accounting information looks the same every year, it should cost the same every year.
Discussion:
The predominate reason we are engaged by a corporation is to prepare a tax return that saves the corporation the most money possible within the constraints of the Tax Act. To achieve this, we prepare a set of financial statements and a tax return. These two documents look the same each year because they are prepared in accordance with accounting and tax rules and guidelines. However, like a high performance custom sports car the real picture can only be seen when you lift the hood.
The reality is that the amount of work we have to perform on a corporation’s financial statements and tax return can change significantly between clients and even between years. This is because:
• individual clients have set up their businesses in unique ways.
• the tax regulations change constantly.
• the environment that the business operates in changes.
• the business that the corporation undertakes changes.
• the manner the data is recorded changes.
• special issues can appear from time to time.
In other words the financial statements and tax return cannot be prepared on a cookie cutter approach. The end result is a combination of technical parts that are constantly being tweaked, changed, refitted, retooled or fine tuned. This means that the work we perform can differ greatly from corporation to corporation and from year to year.
However, with a little bit of planning we are willing to work with our clients to help keep our fees from escalating. We strive to provide value for money to our clients and sometimes that requires incurring extra effort and time to address important issues appropriately that can save future taxes.
Recommendation:
If you would like to discuss your corporations accounting fees, please contact Gilmour Knotts Chartered Accountants.
