How much do you pay your accountant?

[groundspeed]

I was told fbc dont actually have anyone thats chartered. A family member tried to get a large loan last year to buy a busness and the bank wouldnt do it because fbc did their books for several years and said they wont go by them for that reason. Everyone says they charge like hell to.

[mcfarms]

lnewman
Not knowing your situation however be careful of association rules and the loss of small business rates if thats something you have been using to stay under the 500000 limit on the combined taxable incomes of the 2 companies if thats something you may be facing, It's a lot more complex than I had thought. Know someone who is paying a wack to lawyers and accountants because he was left shares in an estate in another land/farming company controlled by his father. They on top of that because of either good or bad management built up cash in the 2 corporations and have put themselves off side with the definition of an active farming corporation (the 90-10 rule) and could be taxed at a very high rate on the net value of the corporation should the controlling officer of either of the companies pass away with the company carrying too much cash so then they have to set up another conpamy and "butterfly" excess cash over to the other company. sounds riduculously complicated.

Some good definitions here

http://www.cabusinessadvisor.com/Defin.htm#SBD

[grassfarmer]

"I want my accountant to help me with other things
like ratio's and benchmarking and helping me
understand my business, goals and future
direction."

That seems strange to me - you should know your
business better than anybody else does. How can
you give your figures to an outsider and expect
them to understand your business better than you
do? And paying them to help you understand your
goals and future direction?

[fjlip]

Ag Expert does Benchmarking and Ratios.
All you need is accurate input. You bank or CU would have advice.
We must set our own goals, write them down and review often.
Succession is unique to your operation.
Accounts would help with the process.

[Burbert]

You boys/girls paying thousands to
accountant, deserve ta loss your farms.
What is wrong wit yous? Is math a big
problem for yous people? Or are you
simple dumb Comedian framers, that are
hopeless, when it comes ta reedin and
rightin.........

[Burbert]

Its in how I worded it, sorry.

We are a multi generation, multi corporation partnership operation and large in acres.

We have a formalized business plan that details both business and personal goals and is updated every 5 years.

What we like is the analysis our farm mgt consultant does with us. Its all about understanding the impact of change in many aspects such as profit per acre, return on assets, return on equity and labor/power/equipment costs.

We provide our banking institutions our accrued stmts if they ask but generally don't require their analysis or a lot of financing. Remember your banker's main responsibility is to lend you money if required and make sure they have adequate security. I don't think they will go out of their way to help you figure out why you are not making the profit per acre as other members, ie:benchmarking

We don't use AgExpert but yes it does ratio's. Benchmarking I question because true benchmarking is comparing to other farm operations. Even when you benchmark, it may not change what you are doing, it only allows the opportunity to think about the possibility of doing something different.

We all have a choice in what we use a professional for. The complexity of each farm is different requiring different level's of service.

We like the firm we have, we do what we do best and allow others to do the same.

[blackpowder]

DO NOT under any circumstance go near FBC!! I would have sued their ass if had the $$.
Your operation size/complexity will drive costs etc.
Main thing for me was to feel comfortable.
Burbert. Obviously someone who can't trust anyone can't trust an accountant.
Mine follows all the govt. programs, understands them. Knows how to legally work them, and corrects and refiles the govt. mistakes.
Non-incorporated shoe-box filing, all programs $3k. No assistants or secretarys doing the work.
For benchmarking then take your #s to a Farm Business Advisor.
Never pay ahead for services

[tmyrfield]

fbc=farmers be cautious.
i hated prepaying for services not yet rendered, i did all the bookeeping and some lackey inputed the data into a program. very expensive and had to pay extra for an early tax call.

[CharteredFarmer]

Hello

Saw this topic and thought I would weigh in. I am both a farmer and a chartered accountant so I can talk about both sideswith knowledge.

This really comes down to a question of need. For your business you can get a T2 only (tax return), a NTR (notice to reader), a review engagement or an audit.

If your bank doesn't need financials and you feel you get good information from your accounting software then opt for a T2 Only (annual corporate return). This is just getting your tax return done and will shave thousands off your bill. Many clients look at the financials once and then file them without realising what that costs. If your accounting is clean and you dont use the financials look at a T2 Only option.

NTRs (notice to reader) is your basic financial statements and T2 filing. This is best when your banker needs financials, when you have owners not involved with the accounting, or if you want a professional glance through your accounting. Know that it costs more.

Review engagement. These are usually required by banks when you cross a threshold of debt. Try everything you can to avoid this as it will add 5K-10K annually to your financials not to mention much more time answering questions from the accountants.

Corporate
CA Firms
T2 Only 800 - 1200
NTR 2500 - 3500
Review 7000 - 13000
Audit 20000

If it is messy expect them to add on more to these base amounts (you know who you are, the guys with 10 adjusting entries).

Non CA firms can only complete T2 Only and NTRs but typically charger 50-65% as much however you do lose some width to advice.

Last piece of advice. NEGOTIATE. Do you pay sticker price for a combine? Accountants sell their staff's time. The model at most agricultural CA firms works on a 5X multiplier (ie. their cost on a job for staff is 1/5 of what they want to charge). Therefore they have an ability to adjust it down.

[M@rketing1]

Saskfarmer99 you make a good point.

You're the expert in operating your farm. It makes sense to spend your time doing that and hire someone with the knowledge and years of experience to manage your taxes.

[Small_biz_jim]

We used FBC, we were told by a sales person that they had a computer system that would match Government programs to our business needs. That was part of the cost. Also at one time we had 2 corporations, I kept saying that I thought the amount was 2 high, I was told, 1 it was because of our amount of cash flow, 2 because it was 2 corps.

When one of the Corps was closed I expected savings, these savings did not appear, then I was told it was our cash flow, well that dropped off, but our bill stayed high.

Finally I had had enough, the nerve of them to ask for payment a year in advance. I could understand that if there were a savings, lets face it that would be good business, to know you have the customer the next year and not have to go looking for new business.

However they wanted $3000 in advance. I finally had enough, told them I was willing to pay $1800 no more, my accountant texted back and forth with his boss and stated that that was not enough.

I was also worried about making any changes, thats why I offered more then I thought was fair ($1500).

Our books are all done by my partner and a general book keeper. Its all in simply accounting. The length of time he spent doing our corporate return was 3 hours, if that. 3 HOURS? for $3000.00

Imagine that. Looks like this may be where the money is.

In 10 years they never once matched us up with 1 program.

We have just meet with a new accountant, her fee will be $1250, right away she saw several areas that we can leverage to keep our taxes down, lets face the government doesn't need any more money to throw away, from us anyways.

We were always left till the last minute. Almost always had to pay interest. In the end all I can say is call around, most people are honest, accountants know how important a dollar is. Getting 3 or 4 quotes will tell you who is taking you for a ride and who isn't.

Thank you for taking the time and working so hard the feed all of us.

I should mention also, our business is not in farming, or even related, however we share many other common requirements.

Best of luck in our search for a new accountant, you will be glad you did.

James in Ontario