How much should you be spending on accounting ?


Most businesses of all shapes and sizes spend around 1% of sales on 'accounting', which is maybe a broad brush term covering many things of course. Why 1% - we don't know but that's what research has found. More than this impacts profitability, less and maybe things are not under control.

Very small businesses may spend more, and much of that 'extra' may be work carried , for 'free', out after hours by the proprietor. Bigger business do not appear to spend less - they take on bigger and more expensive software, have greater demands for internal reporting, and often high costs associated with external PLC reporting.

Book publishers have the additional complexity associated with having to account for the licensing and sub-licensing of intellectual property and that will push the costs above the norm, maybe to 1.2%

This would mean that a publisher with sales of around £1 million should be spending no more than £12,000 on its accounting functions and systems.

As another rule of thumb, we have found that for every one million of sales, a publisher is likely to need one day per week of an accounts assistant at around £100 per day, and one day per month of an 'accountant' at maybe £500 per day. Software would add a further cost of perhaps £50 per month - which all adds up to close to £12,000 a year.