Accountant or software?

morgani

As has previously been suggested it appears that you may be paying more than is necessary although it is hard to comment without viewing the records etc.

Maybe it would be worth approaching a few other accountants. There are many out there that offer all kinds of packages and services that suit the needs of different businesses.

Doing it yourself can be an option but may not be right for you if you lack the confidence?

Best of luck with what you decide. Certainly don't feel you need to stay loyal if your accountant can no longer meet your requirements.

pulck

Thanks for all the replies. I shall approach a couple of other accountants, as I have asked around people working in the same industry as me for a few recommended names.

However, I'm still keen to research the DIY approach... partly because I want to save money... partly because I want to learn for myself and see if accounting really is such a dark art. I'm happy to admit defeat if the task is beyond me, but there's only one way to find out....

A helpful software package would definitely give me more confidence. Pennywise mentioned FreeAgent, which looks good from the website. I will definitely give the 30 day trial a go. Does anyone here have experience of it or of similar packages? Other ones I've seen online are TaxCalc, Simply Books and Legatio Ftax. Some of these packages seem to offer little more than a tax return form-filling helper, but I'd value anyone's advice if they've used any of these packages.

Elaine_Wilson

From what you've said I would agree you are paying top whack for what is done.

As far as the software goes I don't think anyone has produced the whole package as you envisage it. I think of the process as involving three stages.

First is the actual bookkeeping up to trial balance. It sounds as though the FreeAgent package may be ideal for you but I haven't looked at the details. Peronally I just use spreadsheets to summarise client's books or for general bookkeeping.

The next stage is the production of the actual accounts. This is probably insignificant in your business but it involves various adjustments to end up with an accruals based set of accounts. You need to make adjustments for Work in Progress, Prepayments and Accruals. Stocks will presumably not apply to you. I would think you could either do this part on paper or write a simple spreadsheet to suit your business. If you're not clear on these adjustments either do some research or ask again on here.

Finally there is the matter of preparing the return. I believe the Revenue's software is pretty good for this if you have already worked out the figures and it is free.

This is all relatively straightforward once you understand the principles. I try to make sure my clients understand that the actual preparation of accounts and the form filling is not difficult. The tricky part is knowing exactly what is allowable and how other rules , such as changing the accouting date, may be beneficial. That is what they pay for.

If your accountant has already dealt with the 2009 return then why dont you try to see how he got to the accounting figures? Once you understand how the figures in the return were calculated then you will be able to judge if you can do it yourself in future years.

orangeslimes

pulck wrote: »

Thanks for all the replies. I shall approach a couple of other accountants, as I have asked around people working in the same industry as me for a few recommended names.

However, I'm still keen to research the DIY approach... partly because I want to save money... partly because I want to learn for myself and see if accounting really is such a dark art. I'm happy to admit defeat if the task is beyond me, but there's only one way to find out....

A helpful software package would definitely give me more confidence. Pennywise mentioned FreeAgent, which looks good from the website. I will definitely give the 30 day trial a go. Does anyone here have experience of it or of similar packages? Other ones I've seen online are TaxCalc, Simply Books and Legatio Ftax. Some of these packages seem to offer little more than a tax return form-filling helper, but I'd value anyone's advice if they've used any of these packages.

You could also consider something like Cashflow Manager to help you do your bookkeeping... it is quite simple and will help you categorise your expenses and keep track of stuff. If you can do your books accurately i.e. keep pieces of paper in order and actually work out how to do a bank reconciliation (most clients in the firm I work at don't) then you are halfway there.
But I would consider it best to get an accountant to do the final bit - as when you get to stuff like capital allowances etc it is complicated and the rules are ridiculously complicated. (but then I am biased). I am sure you can find a lot cheaper than £1400.
A good accountant should be able to guide you though on the best package to use and if you are still thinking of getting an accountant it is probably best to speak to any potential accountant before purchasing accounting software as it makes sense to use a program they are familiar with. You could also probably create books that are just as useful in Excel (depending on your computer abilities)

kr15snw

My boyfriend is self employed and I have done his books / tax returns for him since day one. His are pretty simple, with the usual outgoings (hes a builder, so materials and stuff) and all of his invoices. I have no maths skills as such, but did enjoy it at school when I was 15, lol.

I'm now going self employed myself, and will be working alongside a friend. I have just found out he pays a fortune to an accountant each year so I'm now running our books and doing his tax return.

pitkin2020

there are always pros and cons, but if your accounts are straight forward it may be worth having the accountant for year 1, to point out expenses you may have over looked but then from year 2 onwards to do yourself.
Im lucky my accountant is very good always happy to offer advice and has a reasonable charge for his services, i'm sure how complex your accounts are but £1400 seems very steep if they are as simple as you say they are, you would be much better looking for maybe a smaller accountant who is self employed/home based rather than an accountant who has loads of staff to keep.
Also worth bearing in mind a simple little test, which i did. I gave my books to the accountant and i also did the tax return (as a mock) myself to see if our figures matched for the tax return, basically i came to a figure of having to paying 1k he came to a figure of having to pay £250 (rough figures here not exact just for illustration purposes) i had to pay him £250, so by my calc i actually saved £500 using the accountant, so if you do a similar test and find your not actually saving any money ditch him and do it yourself.

And for thsoe who thinkits about tax evasion its not its about making sure you claim for every expense that is CLAIMABLE!!! not avoiding paying taxes

longforgotten

All your views are very interesting.

I fall into the category of ' a little knowledge is dangerous thing'.

I also work for an accountant and have spoken to far too many clients who think they have sent in a marvellous set of records, whether that be Sage, spreadsheets, manual cashbooks etc. There are soooo many pitfalls that they are totally oblivious to.

By all means do the book-keeping yourself , but at least in the first year, send them into an accountant and ask for an honest appraisal of the work you ( or your book-keeper) has done. I'm afraid there are also book-keepers who think they know it all and make really basic mistakes repeatedly.

I work for a chartered accountant and I do the donkey work to put a set of accounts together for them to discuss with his client. I do some tax return work but not tax. So I know a fair bit yet if I ever went self-employed I would always have an accountant to check my work and do the important 'bits'.

pulck

longforgotten wrote: »

By all means do the book-keeping yourself , but at least in the first year, send them into an accountant and ask for an honest appraisal of the work you ( or your book-keeper) has done. I'm afraid there are also book-keepers who think they know it all and make really basic mistakes repeatedly.

I think you're probably right. I will err on the side of caution initially and keep on an accountant, albeit probably a cheaper one. However, I will also try to 'backwards engineer' what my accountant has done because I don't really like the idea of not understanding what's going on in my own accounts.

Thanks for all the help.

HornyDevil

Rather than giving him the source records to work from scratch on why not just present him with spreadsheets fully analysing all of the income/expenses/bank/vat etc - ie do the book-keeping donkeywork. Written correctly then from a couple of sheets you can do the lot and it will give you the vat due & profit to date etc on a continuous basis. If they are up to spec then he would have a hard time justifying redoing them and so he fee should be considerably lower.

In all but the most simple cases I would agree that an accountant should be used - Tax is a complicated & forever changing area and the penalties imposed by HMRC for what to you may be an innocent mistake could be more than the fees you'd pay to have it done. Many jobs look simple at first glance to an outsider but you pay for the knowledge of how to do it correctly.

angel_whip

We use Freeagent to do our day to day 'books' which includes invoicing, outgoings, taking money out as dividends/salary etc then send through the reports and give copies of our bank statements to our accountant. Last year she charged less than £500 to do the whole years worth, and that included personal tax return.

I would agree that it's important for you to keep in control of your companies finances and a good software package is essential for this. In the past we used Sage Instant, but now find online software like Freeagent is better as its a) simpler to use and b) can be accessed and updated anywhere - great for people like us who work from the office / home / clients / on the train! HOWEVER - it doesn't replace an accountant and I will always use an expert to check these over before submitting to tax man / companies house etc.

I honestly think that this is the best value accountancy software available in the UK (sorry Sage). As with the guys above, you can make it aven better value by getting 10% of your monthly subscription if you use this referral code:396w913i and I get 10% off my subscription too!

Happy book-keeping and give me a shout if any questions.