Why is there such a huge range of SMSF accounting costs?
There’s a massive range of prices being charged in the marketplaces for the annual accounting, taxation and audit costs for Self-Managed Super Funds. The key reasons behind this disparity are:
- Onshore or Offshore? Some of the firms out there in the marketplace get their operations completed overseas and these firms advertise ridiculously cheap prices but generally suffer from a lack of personalised client advice, language barriers and quality control issues.
- Automation or Manual? The best software on the market is Class Super, owed by the ASX listed company Class. This software is quite expensive per fund and requires accounting firms to have a minimum number of funds. However, it is also beautifully automated and makes the work ridiculously quick and automated. Unfortunately a lot of older school firms are still using manual software like HandiTax, Reckon or BGL which slows down the work and is the difference between an automated job taking four hours to complete per annum and the same job being manually done in 16+ hours.
- The assets held in the fund also have a huge effect, for example shares, managed funds and the like can all be automatically imported via the software and thus take almost no time (eg. The dividend statement from Commsec is auto imported via the feed so no manual time is taken to allocate the income or franking credits) while funds with real property, crypto currency or bullion need to be manually completed.
How much should your SMSF accounting cost per annum
Ignoring the offshore options, the annual costs for an SMSF completed in Australia should be:
- $1,210-$1,540 per annum for the software, accounting, tax returns and audit costs for compliant funds investing primarily in cash, shares, managed funds and having minor allocations in more unique assets.
- $1,540-$2,200 per annum when the fund also includes some real property, bullion or other unique assets.
To pay more than $2,200 per annum you would need to either be non-compliant, have loads of direct properties, tons of advisory or some other major complexity!
- Joe has a 2 million-dollar SMSF owned 50/50 with his wife. The fund has its investments in shares and managed funds he has picked himself (or had a financial planner select) and has not breached any rules. His annual cost is $1,320 per annum including the accounting, tax return lodgement and audit.
- Mary has bought a 1.2million dollar commercial property in her SMSF which she rents back to her own company with a valid lease, the fund is compliant and excess funds are using to pay down the mortgage. As there is only a single property, clean transactions and no non-compliances her fund costs her $1,540 per annum including the accounting, tax return lodgement and audit.
SMSF Australia is a specialist SMSF accounting firm based in Adelaide, South Australia. Our team is led by Emily Cooper who provides support to hundreds of Self Managed Super Funds within Australia as well as providing an outsource service to other accounting firms. If you would like a personalised quote on your SMSF then get in touch today using our contact form or call us on 1300 392 544.