Can You Do Your Own Business Accounts?
Posted: Jun 10, 2016
Many people are perfectly capable of preparing company accounts and filing tax returns for a small company with just a few employees and a fairly simple business model. And it is possible to save money this way, in fact, many small businesses that do employ an accountant are still responsible for all the book-keeping and records maintenance that the accountant will use in the preparation of the accounts. It is now possible (in fact necessary) to use the online submission processes for both HMRC and Companies House which actually makes it easier to file information because the process checks figures you enter at various stages to ensure they are correct.
However, professional accounting services provide more than just filing a tax return online without any errors. If this was all an accountant did then you might justifiably believe you could save money doing it yourself. But what about claiming for all expenses you are entitled? What about structuring your business to minimise your tax liability or setting up a tax efficient payroll system? On top of all that are you really saving money when doing your own accounts because very few business owners factor in the time it takes – time spent away from the day-to-day tasks of running a small business or your own time in the evenings and week-ends.
Some new business owners can spend many long hours putting together the company accounts then submitting the relevant details to Companies House and HM Revenue and Customs; time that could have been better utilised on developing the business. Even if you do not usually work evenings and week-ends (and there is no certainty of that when starting up a new business) this is time when you would put strategies in place for the growth of the company and when you actually have some free time to think about the future options.
By employing an accountant you will not relinquish all responsibility for the company's finances but rather have some help in specialist areas such as tax regulations. A business owner will always hold ultimate responsibility for the financial health of the company and have a clear vision of how profitable it is and where that profit stems from.
Doing the accounts for your own small business can be confusing particularly because there are so many tax rules and they are all subject to frequent change. Whereas it is the job of a good accountant to stay up to date with all the latest regulations which can ensure a company not only complies with the latest regulations but also takes advantage of any possible tax efficiencies.
Using a professional accountant will give you more time to concentrate on what you are good at i.e. running the company. But if you are still not convinced then try doing the accounts yourself; once you understand what is involved it is often easier to make the decision to employ a specialist. To help with budgeting there are plenty of fixed fee accountancy packages available where the cost is fixed at the beginning of a year.
The author has written and published articles on a wide range of topics including Small Business Advice, Tax and Accounting, Interior Design, House Renovation and Project Management.