Are CPA Fees Too High for Dental Accounting Services Rendered?

I became an IC in June of 2010 and paid my current CPA about $700 to incorporate me.

What did that involve? I suspect it not only created your entity it covered applying for your fed and state ID numbers as well for corporation income and payroll taxes. If so I think that amount is fair.

I also agreed to allow him to run my payroll (it’s just me) and set up my taxes and 401k. His firm does everything for me, all I’ve really had to do is follow their instructions and sign a few forms they prepared on my behalf. I received a bill for Aug 1st through January 31st for about $6k and the other day I received another bill for February and March of about $1500.

I don’t have anything out of the ordinary that I believe would cause such large bills.

Except you just said they do “everything” for you…again, what does that mean? Get a list of services they provided.

That’s pretty much it and most of my colleagues are paying around 2k a year for the same services.

Really? Most of your colleagues became IC’s in June, created entities and have their CPA firm apply for ID numbers and run their payroll and set-up their 401k plans? Are you sure about that? Those are NOT typical annual services….some of them are and even then, services like payroll and 401k administration are done by other providers, NOT CPA firms.

Is there a way to approach this without offending him? I prepared to give him an ultimatum to reduce my fees for the remainder of the year to total around 2-3k AND I also want to negotiate my current bill of $1500.

Well I hope you aren’t prepared to throw out the ultimatum right from the get go. That’s NOT the best way to open up a discussion where you might want something. If I were you I’d go in prepared, that is, ask for an itemization of the bills – i.e. services provided and the cost of each service. Review that before the meeting and use the servicescosts you have issues with and allow them to explain. If you need to keep your costs within a certain range that’s fine. Ask them what services they can provide to keep the fees within your budget. You might find that having a payroll service maintain your payroll MIGHT be cheaper anyway.

Do I have a right to refuse to pay the bill or only pay a portion that I deem appropriate?

That’s an odd question in my opinion. Does a patient of yours have the right to refuse a bill for services you rendered or only pay for the services THEY deemed appropriate? Think about that. Part of the lesson here is to ask about the fees of the specific services you want performed BEFORE they are performed, even if it’s an hourly rate for a service they can’t state a specific price for.

Good luck.

This first appeared on Dentaltown.

Send your questions to Tim Lott, CPA, CVA at

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