Cost-effective accounting alternatives to major firms.

The big 4 accounting firms, Deloitte, KPMG, Pricewaterhousecoopers (PWC), and Ernst and Young (E&Y), tend to be more expensive than local accounting firms in Toronto.

In many cases, smaller accounting firms offer the same, if not better, quality of work and exceptional client-service, as compared to the Big 4. Should your company consider a local accounting firm and cost effective alternative in Toronto / Mississauga as an alternative to the Big 4?

The Top 4 reasons why you should seriously consider a smaller accounting firm are:

1. Less expensive than Big 4

The rates charged by smaller accounting firms tend to be significantly less than the big 4 accounting firms. For example, a tax partner at a large accounting firm may charge from $700 to $900 an hour, and junior accountants are usually priced at $250 an hour.

At a small accounting firm, you can obtain the advice of an experienced Chartered Accountant for $250 / hour, which is better value for money compared to what you’d get at the big 4.

2. Same quality of work – alternative to big 4

Local accounting firms in Toronto and Mississauga can produce the same quality of work as their larger competitors. The reason being is that many local accounting firms are run by former employees of the big 4. (In fact, I used to work at Deloitte Toronto & Mississauga, but now I run my own accounting firm).

3. Personal Partner Attention

It’s sometimes difficult for the partners at the big 4 (PWC Toronto, Deloitte Toronto, KPMG Toronto and E&Y Toronto) to service each of their clients personally. Often, clients are looked after by more junior staff, as big 4 partners have a heavy client load.

Local firms can provide greater personal partner attention to clients, given their relatively smaller size.

4. Greater efficiency

Generally speaking, at a big 4 accounting firm several staff may be involved in a simple project, such as the preparation of a corporate tax return. The junior staff member may input the data into the corporate tax return, which is then reviewed by a senior staff member, then reviewed again by a manager, followed by a review by a senior manager, and eventually signed-off by the partner in charge of the client.

While several reviews by different levels of staff reduce the chance of error, the cost / benefit of such extensive reviews such also be examined. Does a simple corporate tax return really need to be reviewed so many times?

At a smaller accounting firm in Toronto or Mississauga, a corporate tax return is generally prepared by one staff member and then reviewed by the partner. This is very efficient, as it reduces the need for multiple staff on the same assignment.

Greater efficiency translates into lower fees, and more timely delivery of the service.

ABOUT THE AUTHOR

ALLAN MADAN

CPA, CA

Allan Madan is a CPA, CA and the founder of Madan Chartered Accountant Professional Corporation. Allan provides valuable tax planning, accounting and income tax preparation services in the Greater Toronto Area.

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