Paying accountant upfront?

[PeppermintScreams]

We are in the process of setting up a new business and our accountancy firm want us to set up a standing order of £200 a month which will be deducted off of their monthly invoices.

I'm guessing that this is industry standard, but DP isn't happy about it. Is this usual?

What do they expect the invoices to be over and above the £200?

What are they doing for you? Is it monthly or annual tasks? £200 sounds like a lot but it depends what sort of business...

We pay ours yearly but he's not doing anything most of the year. We run our own payroll though.

we have lots of our clients on monthly standing order, but we agree an annual fee for what we're going to do, then split into 12. We don't do monthly invoices as well. Clients like knowing what the regular payment is, and not getting one-of bills for eg year end accounts, as it's all included.

Like Midnight I am also an accountant. Some businesses prefer to have a regular payment rather than one bill for £2,400.

What services are they providing? Have they provided quotes or estimates of fees?

If they haven't explained things to you, they aren't doing a very good job. Ask them!

£2400 a year is a heck of a bill.
my clients would want blood for that in their first year.

get a detailed breakdown of the fees and compare them (UK Business Forums are a good place to gauge fees)

We (and they) don't know exactly what we need yet, as it's a completely new type of internet business, and HMRC haven't got a category for us yet. (or something) We don't know if we'll meet the VAT criteria yet as a lot of our sales are overseas.

Currently the plan is for them to sort out our partnership accounts, personal tax returns, analyse the partnership accounts and open two limited companies. They are charging us separately for setting up the two companies.

Judging by how much they charge an hour I'm going to guess that £2400 isn't going to go far.... but it's small change compared to what our tax bill.

I'll take a look at the UK business forum.

You are being fobbed by accountants who do not understand the internet.
There are HMRC codes for general internet traders including import export.
THe VAT criteria are in black and white on the HMRC website.
I'd strongly suggest you get some advice from the clever bods
www.ukbusinessforums.co.uk/forums/forumdisplay.php?f=55

I've just opened my own accounting business and for the services you described, that sounds like a hell of a lot and thats a massive pressure on your cashflow if you are just starting out!

I would encourage you to get a few other quotes (if you havent already) and even though standing orders are standard, for my clients who are starting up, I work on an arrears basis and collect the agreed fee once I have done the bulk of the work for them (which usually revolves around when their tax return is submitted).