How much admin. involved in running a Ltd Company?
Options
Comments
-
as with anything in life, if you are prepared to put the time and effort into learning the rules then you are correct, "anyone" can manage the record keeping for a (small) Ltd Co.It is actually *not* particularly complicated to do it all yourself, though you will find plenty who claim it is, as on this thread. I think nearer the truth is that it's not the kind of work everyone feels comfortable with, particularly if you've never had much contact with accountancy.
The question is why would you? The purpose of being in business is to make money, not avoid expenses by trying to DIY something that stops you making money when you can easily employ someone else to do the admin for you. I agree with your sentiment that such someone can be of variable quality, so go on a recommendation... but do find out what the referral fee is underpinning that "recommendation".0 -
But in my experience even paying more doesn't guarantee you get someone who knows what they're doing and does a conscientious job.
I've had bad experiences with garages - does that mean I should service my own car?
I've had a bad plumber - should I change my own boiler next time?0 -
Thanks very much everybody for sharing your thoughts.
Does anybody have anything tangible in terms of how much time all the HMRC and Companies House admin. takes please? Does it take 10 hours a month, 20 hours a month etc.?
People often advertise things to be easy and quick, until it is actually done. For instance, in my repeated experience HMRC don't even pick up the phone unless you wait at least 30 minutes.
HMRC's new-fangled idea to force businesses into quarterly filings, on top of the annual work, will only add to how much time is consumed.0 -
It totally depends - how long is a piece of string.
Do you have tons of expenses? Are you flat rate VAT registered? do run payroll? Will you use accounting software or will you use a spreadsheet? Do you send invoices or are you a contractor on self billing?
I have a limited company and hate the admin component. Realistically it only takes me 1 days every quarter but i dread it. I have flat rate VAT so that is less admin than claiming - however some people get their accountant to do their VAT too. I don't scan receipts but others do. I don't even invoice - my company self bills...yet i long for a day when i don't have to worry about "doing my books". worst time is end of March as its year end...which means printing out phone bills, utility bills etc. Ughh.0 -
Does anybody have anything tangible in terms of how much time all the HMRC and Companies House admin. takes please? Does it take 10 hours a month, 20 hours a month etc.?
Generally I used to leave everything above as it didn't demand of me. So maybe 15 minutes a month to do wages for two of us.
CH yearly statment, maybe an hour, time spent finding paperwork and logins, then actually doing it, paying and printing a receipt.
I found it was the book keeping and end of tax year work that really sent us off the deep end. Say you are busy, so 4 or 5 days a week, working, there is still paperwork with filing - maybe invoices, receipts, anything else. I found come the weekend when it was quiet we could do the bookwork, enter expenses, so fuel, spares etc. Then deal with online transactions, Paypal, Stripe etc.
For us one weekend a month we would try and sift through it all, so a good Saturday and Sunday morning. Sometimes we wouldn't do it, had to go out, take the kids out and then would get a little bit more behind. Right before we took on the accountant we had got 5 months behind and I couldn't remember some of the transaction details.
So, I guess it really depends, in the early days if it is a simple business you run, you may be able to keep up, if it gets busy, you may find you run out of steam.
Also, don't forget about HMRC Coporation Tax returns - I couldn't get them right and after a few rejections I gave up - the language on the forms is very 'accountant style' and really getting all of that correct and dealing with your tax affairs is I think where an accountant is invaluable.0 -
next to none above what you'd do as a self employed person if you do it yourself, presumably you'll be keeping on top of your accounts, paying VAT, paying yourself etc anyway, so those are essentially the same.
the only other thing is logging in to the companies house once a year to do your confirmation statement and file your accounts, which any decent accounting package will do anyway.
or just pay's your money and get an accountant to do it all for you.0 -
+1 for the accountant. The actual paperwork for the company is very little if you are just the owner, a confirmation statement every year and a few other bits is pretty much all I do, and my accountant helps me with this.
However, for the finance side of things, you are looking at a world of pain. You can get software that helps you with this such as freeagent or sage. But one mistake can be costly. My accountant is worth their weight in gold, and they save me quite a lot too with efficient tax and vat planning.0 -
Remember, even if you employ an accountant you'll still have to spend time on an accounts package - unless your accountant is happy to receive a box full of random notes, letters, invoices, receipts etc. You will spend time allocating money to various accounts depending on what type of expenditure etc they are. How much time that takes really depends on how much business you will be generating.
Why not start off as a sole trader, see how it goes and, down the line, if you feel you need help, then employ an accountant. Jumping straight in with a Limited Company, accountant etc if the turnover is only going to be a few grand is going to be overkill, which is why I would suggest starting off as a sole trader and seeing how it goes.0 -
Remember, even if you employ an accountant you'll still have to spend time on an accounts package - unless your accountant is happy to receive a box full of random notes, letters, invoices, receipts etc. You will spend time allocating money to various accounts depending on what type of expenditure etc they are.
I'm not sure this is correct.
You don't need an accounting package - just a way of generating invoices, and tracking payments. Unless you are some kind of retail business, where it is small cash and card payments to total and reconcile.
We take to our accountant.... a file of fuel receipts, purchase invoices or receipts, electronic copy of our invoices uploaded to Box.com, and monthly bank statements.
Their book keeper sorts it all out and tells us if the ins/outs don't add up.
It takes us maybe 15 minutes to collect it out of boxes each month, 10 mins to generate and upload invoice data, and I drop them off when I am passing.0 -
Thank you for the invaluable advice folks. It's really useful to see what things are like for entrepreneurs in a 'real world' scenario.
I really like the idea suggested by Vectis of starting out as a Sole Trader and then seeing how it goes. Hopefully being a Sole Trader will be slightly less admin and paperwork.
The websites of some banks request a copy of your Incorporation Certificate etc. if you are applying to open a business bank account. Are there are good business bank accounts of the larger banks that accept Sole Traders?
Actually, thinking about it, as business bank accounts incur various charges, it'd be cheaper if I just opened a different personal bank account and then used that for my (low-volume) business transactions. At least then my transactions will be separate from my personal ones, but I won't be paying business banking fees. Is that workable?
Cheers.0
This discussion has been closed.
Categories
- All Categories
- 343.2K Banking & Borrowing
- 250.1K Reduce Debt & Boost Income
- 449.7K Spending & Discounts
- 235.3K Work, Benefits & Business
- 608.1K Mortgages, Homes & Bills
- 173.1K Life & Family
- 247.9K Travel & Transport
- 1.5M Hobbies & Leisure
- 15.9K Discuss & Feedback
- 15.1K Coronavirus Support Boards