How Much Should a Limited Company Accountant Cost?
Two accountancy quotes can look very different, even when they both say ‘limited company accounts’. One may cover your year-end filings. Another may also include bookkeeping, VAT returns and regular conversations about how the business is doing. Before you compare the price, compare the job you are asking each accountant to do.
There is no single fee that suits every limited company. A useful quote should reflect your records, the work involved and the support you want. Here is how to work out what you need, spot the gaps between proposals and decide whether the fee makes sense for your business.
The short answer: start with the scope
Ask for a written list of what the accountant will do, what you will do and how often. ‘Monthly accountancy’ may describe a payment arrangement for annual work; it does not automatically mean monthly bookkeeping, reporting or advice.
A smaller company with tidy records and straightforward transactions may need a different service from a growing employer with stock, several sales channels or overseas trading. Turnover matters, but it does not tell the whole story.
What affects limited company accountant costs?
1. The amount and complexity of the work
Transaction numbers, bank accounts, payment platforms, employees and VAT arrangements all affect the work involved. A business with a few invoices each month can take less time to support than one with hundreds of low-value sales. Stock, foreign currencies, multiple companies and specialist transactions may need additional attention.
2. The condition of your records
Current, reconciled bookkeeping is a different starting point from missing receipts, unexplained balances or a backlog of bank transactions. Ask whether the quote assumes your records are ready for review. Any catch-up or correction work should be identified and priced separately where possible.
3. Who handles the day-to-day bookkeeping
Will you upload bills and reconcile the bank, will a member of your team do it, or will the accountant manage the process? Agree the handover points. If both sides assume the other is doing the same task, missing records can turn into extra work later.
4. How often you need figures and advice
Annual accounts explain a period that has already finished. Monthly management accounts, regular reviews, budgets and cash flow forecasts involve different work. Decide which decisions you need help with, rather than paying for reports nobody uses.
5. The services and costs outside the headline fee
Check payroll, directors’ personal tax returns, bookkeeping, VAT returns, software subscriptions, filing fees and setup costs. Also ask how one-off advice, HMRC enquiries and work outside the agreed service will be charged. An exclusion is not a problem when it is clear from the start.
What might different accountancy packages include?
Package names vary between firms. The illustration shows three broad levels of support, using LMH’s published package structure. It is a guide to scope, not a promise that every service is included for every business.
Annual accounts and tax support
This may suit a company that keeps its own books and mainly needs its annual company accounts and corporation tax return prepared, with an agreed review. Check whether help with routine questions is included and what ‘ready for year end’ means in practice.
Regular bookkeeping and financial housekeeping
This adds agreed bookkeeping, bank reconciliations and VAT work where relevant. The practical benefit is a clearer division of responsibilities throughout the year. Confirm the transaction allowance, how often records are updated and whether a review meeting is included.
Reporting and proactive financial support
This can include monthly management accounts and a review of what the figures mean. Budgets, cash flow forecasts and finance director support may be separately scoped. A useful review should lead to actions: change a price, investigate a margin, chase a debt or plan the cash needed for recruitment.
LMH’s published starting prices: useful examples, not a market average
LMH’s Fees & Packages page lists Company Essentials from £195 per month, Business Support from £395 per month, and Growth & Insight from £695 per month. These are LMH’s own indicative starting prices, not a claim about what every accountant should charge.
The published descriptions set out the differences. Company Essentials includes annual company accounts, the corporation tax return and an annual review. Business Support adds bookkeeping, bank reconciliations and VAT returns within an agreed allowance, plus a quarterly review. Growth & Insight adds monthly management accounts and a review meeting.
Prices exclude VAT where applicable. Software, filing fees, catch-up work and other services are confirmed in your proposal. Budgeting, forecasting, systems projects and finance director support are quoted separately. Your actual fee depends on the agreed work and volumes. Always check the current page and your personalised proposal.
Basic compliance or proactive support: which do you need?
Compliance work helps you meet accounts and tax obligations. Proactive support helps you use the figures while there is still time to make decisions. Both have value; the right balance depends on your business.
For example, imagine you are considering your first employee. Preparing last year’s accounts will not, on its own, tell you whether next quarter’s receipts can cover the full employment cost. That needs a forward-looking calculation and realistic payment dates. Ask whether that work is included or needs a separate quote.
Equally, a straightforward company does not need an elaborate reporting package just because it is available. Start with the questions you need answered and choose the support around them.
Six questions to ask before choosing an accountant
What exactly is included: company accounts, corporation tax, bookkeeping, VAT, payroll and personal tax?
What is charged separately: software, filing fees, setup, catch-up work and one-off advice?
Who keeps the records up to date, what must I provide and when?
Who is my contact, what response time should I expect and when will we review the figures?
What transaction limits or changes in my business would trigger a fee review?
How will the handover work, who owns upcoming deadlines and what notice terms apply?
A simple way to compare two quotes
Write your required services down one side of a page and give each firm a column. Mark each item as included, extra or unclear. Add the annual equivalent of monthly payments, agreed one-off costs and software charges. Compare the same period and the same VAT basis.
Then compare the practical service: who will do the work, when you will receive it, relevant experience and how clearly they explain things. Ask to see a sample report with client information removed. A higher price is not proof of better advice, and a lower price is not proof of poor service.
Can Xero reduce the work involved?
Xero can support a more organised process, but buying a subscription does not make incomplete records accurate. Bank transactions still need checking, purchase evidence still matters and responsibilities still need agreeing. Ask what setup and training are included and whether the subscription is paid by you or included in the accountancy fee.
Looking for limited company accountants in Hinckley?
At LMH Accounts, we help limited companies and growing small businesses in Hinckley and across the UK with accounts, bookkeeping, tax and practical financial support. Tell us how you currently keep your records, what takes up your time and what you want help deciding. We can explain the options in everyday language and prepare a personalised quote.
Comments