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Paying Your CPA?

How much do you spend on tax and financial statement reviews? We have about 50 employees in a typical agency located in Southern California. Our CPAs only prepare our tax returns (owner and S corporation) and do an annual review of our financial statements (not an audit). Their fees seem astronomical for the amount of work they do. They charge in excess of $30,000 to do this work. Does anyone have similar work done? What are the charges?

Beth Flinn
Senior Accountant
The Townsend Agency

Way out of line. We're about half the size person-wise. Pay $2500 for review, $1500 or so for corporate (Sub S) return, & $150-250 each for various owners' returns. If you're working with a Big 5, try looking at a local firm. Unless your lenders require it or you have some really hairy tax situations, they'll do just as good a job.

Brent A. Byrd
Chief Financial Officer
Point Zero, Inc.

$30,000 seems high to me, but then I may not know all the particulars. Youhave a Review done, not a Compilation or an Audit and your accountant files your corporate tax. Our state has a CPA board you can contact as a source of professional accountants if you're looking for one and/or service rates or for information.

If your state has a comparable board, you might want to contact it. Ask your accountant what's the cost difference between a Review and a compilation. It could be more than you might suspect. Do you did a Review? A compilaton is all I have ever needed. That may not be your case, however. You're an ad agency. You know what clients do when they think they are being over charged. Ask for the hourly rates and time reports. Review the time and tasks on your account, etc. Are senior partners doing tasks that a lower billing rate associate could do?

I know a lot of accountants in my area. I've overheard some of them talking about billing what the market will bare. This is not an illegal practice. Some ad agencies use it too. However, I know I wouldn't want to be one of those clients. How about you?

Rick Graf
Graf Advertising

We are a 10-person agency. Our CPA does similar work and charges around $2,000 maybe a little higher. However, the annual review of financials may not be as detailed as what you have done. In fact, it is pretty breif. Hope this helps.

Sheryl Creech
LJF Associates, Inc.

Our company is located in Florida. We have 28 employees. If we need any questions answered during the year they charge us a small amount. They prepare our owner and S Corp returns and do an annual review of our financial statements. They charged us last year just under $ 4,000.

Bonnie Gray
CFO
Clarke Advertising

I pay $5-$6K for tax work (owner & S corp), but I prepare workpapers. I recently engaged them to do review for additional $2-$3K - but again I do all workpapers. We are 25 people in No. CA. They are not Big 5.

Roxanne Cowan