It’s an eternal struggle for almost all accounting offices. Or at least for those that don’t offer their services for the price of a carton of eggs or don’t compete for the title of the cheapest accountant. I’m talking about the price of accounting services. In this article, I will therefore analyze what and why it influences it – at least at Jaspar.

 

Information in an inquiry often doesn’t reflect reality

A typical inquiry for accounting services includes the number of documents, entries in bank statements, and the number of bank accounts. For payroll agendas, inquirers state the number of employees with different contracts, payroll deductions, foreign employees, etc.

What is almost never included? A description of the actual state of the accounting. Why? A large number of entrepreneurs understand the economics and accounting of their company much less than they should. They are therefore unable to assess its condition.

If a potential customer is willing to meet and doesn’t just want a “shotgun” price quote based on a single email (which is common), I can usually ask for details and get a real picture. Even then, I am sometimes far from having an ideal understanding of the “starting line” of our cooperation.

The actual amount of work required for proper and accurate bookkeeping often comes to light only when we begin familiarizing ourselves with the documents. That’s when all the skeletons come out of the closet.

 

The amount of documents to be processed is just one piece of the price

The number of processed documents remains the basis for determining the price. There is simply a difference between managing the agenda of an LLC without employees and with ten invoices per year, and a company with fifty employees and thousands of entries per month.

If your business requires special knowledge or specific activities (for example, you trade in large quantities of products subject to excise duty, you keep accounts according to IFRS, you are in finance where other regulations apply (AML – Anti Money Laundering, …)), you have to expect higher prices.

 

What do you expect from accounting?

Another factor influencing the price is the customer’s expectations from accounting and the complexity of the outputs for further (managerial) work.

The typical expectation is to get the minimum necessary to meet legal obligations at the lowest possible price. That is, a situation where the customer “throws” documents for the past month into a metaphorical “accountant” machine and tax returns for the financial authority, SSA, and health insurance company “fall out”. Many entrepreneurs still see accounting as the greatest “necessary evil” they endure only out of duty.

Then, once in ten years (as Václav Lohnický as a psychiatrist in the movie “Jáchym, throw it in the machine” would say), a customer appears who sees something more in accounting. The data needed for high-quality and responsible financial management of the company. Such a customer:

• Primarily addresses the value he or she gets from us.
• Meets with the accountant every month, consults, and collects inputs for management.
• Wants to understand the main parameters of accounting and perceives them as important data for financial management.
• Wants to see future outlooks and how various decisions, investments, or expected events will affect the financial health of their company.
• Doesn’t use Excel for working with finances but uses management reporting from accounting software, including data visualization. Thanks to this, they are much better oriented and can make informed decisions.
• Works with simulations of profitability and cash flow for different company development scenarios.
• Prepares different action plans for these simulations. They are thus prepared to deal with them correctly in time. As the saying goes: “He who is prepared is not surprised.”

 

Low price = higher risks

Accounting offices with low prices must logically cut costs somewhere. Such offices don’t have money for investments in technology. They can’t invest in security. In systems and tools that streamline their processes. They can’t pay a high-quality team well, nor can they invest in its education and development.

I’ll give an example. The development of our controlling system, which reduces the risk of human error and allows customers to look into their accounting, cost hundreds of thousands of crowns. Or liability insurance, which is still rather an exception among accounting offices, costs us tens of thousands annually.

 

How do we handle technology at Jaspar?

• We have our own secure internal network outside the “standard internet”. All customer data is sent over this network. Thanks to this, it is protected from external threats (hacker attacks, data theft, ransomware (data locking and ransom demand for its re-release), etc.).
• We have developed our own online management reporting system.
• For communication and management of customer requests, we have a ticketing portal where you can track the status of tasks and send documents.
• For archiving, we use an online trustworthy archive. Forget about binders stored for decades.
• We back up data multiple times on our own, geographically separate servers.
• You can access your accounting software through a web browser. No remote desktops, complicated installations, and the like.
• We insist on maximum security. We have deployed two-factor authentication for key systems. Only authorized persons can access them.

 

Thanks to these investments, our customers can sleep peacefully. They significantly reduce the possibility of something going wrong. And a lot can go wrong in accounting! Do you want examples? Read our case studies.

What follows from this? An accounting office must have enough money to increase the added value of services and minimize possible risks. The customer then has to choose whether they want peace of mind, quality data, and top-notch service, or a low price.

 

An individual accountant is generally cheaper

he situation is different with individual accountants. They use to be extremely cheap. Why?

• They work from home. They don’t pay rent for an office.
• They have a single license for a single accounting software. If you want access to it or work in a different system, they usually cannot accommodate you.
• The software runs on a computer that may remember Windows XP.

 

Using the services of individual accountants has critically important disadvantages:

1) Such accountants have limited expertise and experience defined by the small number of companies they provide services to.

In contrast, larger accounting offices, including the Jaspar company, benefit from know-how collected and shared by the entire team. Each new member of the team expands this know-how. By sharing the experience they have collected, the team significantly increases the chance that every, even very non-standard, situation will be resolved correctly. Individual accountants have to rely on themselves or advice from the Internet.

A larger team also offers broader expertise. One accountant handles several companies with foreign clients. Another has experience with a specific industry or with customers subject to less common laws and regulations (finance and investments, arms industry, sales of spirits, etc.).

 

2) And most importantly – an individual accountant is not replaceable!

Their customers take an enormous risk. Key data for company management and meeting legal obligations depend on the availability of a single person. What if they get sick? Die? What if for some reason they stop communicating and disappear? Literally! Believe me, this is not just a theory. We have experienced such cases.

 

From our practice: When reality exceeds expectations

Hundreds of meetings with those interested in our services led me to write this article. But the final nail in the coffin, in which my aversion to writing lay, was driven by one of our recent customers.

A larger company. Turnover of CZK 30+ million. Thousands of items to be accounted for monthly. They do a lot of the preparations themselves. They prepare all the documents for us. They send them digitally. They match the bank account, etc. What they don’t know about preparing documents, they want to learn. And they will pay for us to give them more attention in the beginning. Thanks to all this, I was able to offer them a very fair price.

Then reality hit. We received the documents and started working. But the accounting was much more complicated than we expected. Suddenly a requirement that the customer had not mentioned during the meetings was added. Monthly closings are now needed. Or much more output for financial management than is in the contract. Of course, nothing is a problem. We will take care of everything.

But then I sent a new calculation of the monthly flat rate. 60% higher. The customer was unhappy. “But we have a price in the contract!” they say. “Yes, we do! And also a scope of services that the original price corresponds to,” I retort.

 

A matter of choice

The customer has to choose. Do they want cheap accounting, or do they want everything they need for financial management and qualified decision-making? Do they want an accounting office that will provide them with the basics for fulfilling legal obligations? Or do they want a technologically, professionally, and knowledge-wise advanced partner capable of providing them with everything they need for high-quality managerial work?

For you to have good documents for managerial decision-making, the chart of accounts must be set up correctly from the very beginning. This provides data for financial reporting. You make decisions about company management based on reporting. Costs, revenues, cash flow. All this plays a role in whether you keep the company stable and financially healthy. And also whether its operation will be sustainable in the long term or not. Correctly setting up the chart of accounts requires time, consultations, and at least a basic knowledge of accounting terms and principles on your part.

 

Automation and solutions for seemingly more complex cases

If you choose an accounting office based on price, you will probably miss out on opportunities related to advanced know-how and the necessary investments in technology.

I will mention, for example, one of our largest customers operating with a large number of warehouse items. This means:

• stocking and unstocking components for production,
• assembly of products from them,
• stocking finished products,
• unstocking products when they are sold, etc.

 

That is, operations that larger companies can have hundreds or thousands of per month.

An individual accountant or a cheap accounting office would probably not be able to account for such a customer. Or they would spend many dozens of hours of manual work on them. The customer would ultimately pay for this.

At Jaspar, we have sufficient financial and knowledge capacities to automate the accounting of such operations using advanced technologies and experienced team members. Thanks to this, we are able to serve this customer. Often even on more favorable terms thanks to the smaller proportion of expensive human labor.

 

In conclusion: Think before you send an inquiry

Whether you contact Jaspar or any other office when choosing a new provider of accounting services, be sure to consider before sending your inquiry:

• Is your case specific in any way? For example, do you operate in a field influenced by specific legislation Or do you have huge movements of items (stores, warehouses, in bank accounts, etc.) that a larger office could process more efficiently thanks to technology?
• Do you have extensive accounting, or just a few invoices per year? The more extensive and complex the accounting, the more difficult it will be to transfer it to another accountant if your provider is unable to continue working for some reason. We have also experienced cases where it was simply not possible to hand over the accounting. Its reconstruction was therefore necessary. Then we are talking about costs in the tens or hundreds of thousands. And it’s not just about situations where the accountant completely stops doing their job. A longer-term illness or hospitalization at the worst possible time is enough – typically during the preparation of the annual closing and the income tax return.
• Do you just want documents to fulfill legal obligations? Or do you expect information for good management of company economics and finance?

 

Only then do I recommend sitting down at the computer and sending an inquiry. You will avoid disappointment and a waste of time and money on both sides.

 

Have you thought everything through and are ready for a new start?

Do you want accounting services that will really help you manage your company? Contact us. We will be happy to discuss everything with you in detail and without obligation.