12.07 – Do You Need An Accountant?
Accountancy is a fundamental business discipline, much like sales, research, administration, or production. Managing, motivating, rewarding, and appraising your accountant is essential, whether they are a part-timer from outside or a fellow director. As the business owner, you must take the lead.
Getting The Best out of Your Accountant
- Timely Management Accounts: Your monthly management accounts should be available within a week of the end of each month. If this standard isn’t met, you might need a different accountant or accounting system. If you don’t have monthly management accounts yet, make it your accountant’s next measurable goal.
- Clear Reporting: Accounting systems and reports should be simple, jargon-free, and supported by clear explanations of key issues. For instance, if profits are down by 10%, an explanation that a 5% reduction in sales of product X and a 5% increase in raw material costs caused this reduction gives a clear indication of responsibilities and possible remedies.
- Visual Data Representation: Some accounting systems can display graphs to highlight trends and use pie and bar charts to bring figures to life.
- Compliance and Standards: Your accountant should ensure that your books and records meet the standards required by company law, including accounting policies, VAT returns, PAYE, and tax demands.
- Industry Familiarity: Your accountant should be familiar with your industry, business size, and startup challenges. The less they know about your situation, the less helpful they will be.
- Accounting Software Proficiency: Expect your accountant to be proficient with accounting software. They may include access to a preferred accounting system in their fees, which is a point worth negotiating.
Finding Your Financial Wizard
The accounting field has evolved, with a new emphasis on business needs. Here are three modern accounting practices tailored for business starters:
- Gorilla Accounting: (www.gorillaaccounting.com) Prices start at £50 plus VAT per month. You get a dedicated accountant, access to FreeAgent bookkeeping software, and 12 months of free business banking. They also prepare your self-assessment tax return and quarterly VAT returns. For an additional £50 plus VAT, they can set up your limited company.
- Crunch: (www.crunch.co.uk) Offers free accounting software at the entry level, with additional services available. For £24.50 plus VAT per month, the Sole Trader Pro package includes dedicated client management and personal self-assessment tax filing. VAT-registered businesses can add VAT return filing for £5 per month. The total for e-retail or businesses using PayPal regularly is £29.50 plus VAT per month.
- The Accountancy Partnership: (www.theaccountancy.co.uk) The sole trader package starts at £24.50 plus VAT per month, including a dedicated accountant, online accounting software, year-end accounts completion, and a mobile app for invoicing and receipt uploads. They also handle self-assessment tax return submissions and offer unlimited support. Free representation is provided in the event of an HMRC investigation.
If you already have accountancy software you are happy with, consider using their resources to find an accountant. For example, Intuit QuickBooks has a directory of fully accredited accountants and bookkeepers (www.quickbooks.intuit.com/uk/find-an-accountant). You can search by geography, type of service, and business sector. Finding an accountant with relevant industry knowledge can give your business a strong start.
Leveraging professional accounting services and tools ensures your financial health is maintained, providing a solid foundation for business growth and stability.
