Welcome to Enterprise and Business Gateway's Book Keeping and Accountancy Month.
For the month of September, we are going to look into all of the things you might want to consider for the book keeping and accountancy requirements of your business. Our resident accountancy expert, Liz Pirrie is on hand to keep things clear and simple for us all.
Week 1 (last week). Book Keeping - How you can 'Do It Yourself' - you can read that post here
Week 2 (this week). How to choose a suitable practitioner for the trickier stuff
and still to come...
Week 3. The pros and cons of online book keeping software and
Week 4. Your commonly asked questions.
Last week we spoke about DIY book keeping and hopefully you picked up some useful tips from that. However, we also mentioned that there are times when it makes sense to pay someone to do it for you. This can be because there is something tricky about your books, or simply because numbers just isn’t your thing. The trick is recognising when you are better to step back and let the experts take over. A good accountant can save you money in the long run and keep you from inadvertently putting yourself on the wrong side of the law.
We accountants don’t get very good press. Apparently we are boring, dishonest and over charge. Of course, some accountants fit that description perfectly, but let’s have a look at some of the questions you should ask yourself to help you find the exciting, honest, value for money accountant that suits your business.
Do I need an accountant or a book keeper?
Yes, there is a difference between accountants and book keepers. Essentially, book keepers do the day to day stuff such as invoicing, credit control, invoice processing, payroll and bank reconciliations.
Accountants do all the technical wizardry at the year end, producing year end accounts and saving you lots of tax when they do your tax return.
Depending on their experience and level of qualification, a book keeper should be able to do your VAT returns for you and possibly your self assessment (personal) tax return if you are a sole trader or partnership. They won’t be able to do statutory accounts for your Limited Company or the corporation tax return.
Your accountant will be able to do the book keeping for you, although they may charge you more than a book keeper.
You can choose to use a professional to do only your year end accounts and tax returns, or every aspect of your book keeping and any level of service in between. You can also use a book keeper to do the day to day processing then a different accountant to do the year end work. If you do that, it’s worth checking that the accountant is happy to work with your book keeper and vice versa.
How do you know they are qualified to do the job?
Book keepers can be members of the Institute of Certified Book keepers (IBA), but this is not a legal requirement and so it is possible for anyone to set up as a book keeper.
The term “accountant” is not protected, but your accountant should have one of the recognised qualifications. The main qualifications that you will see are CA (Chartered accountant); ACCA (Association of Chartered Certified Accountants) and CIMA (Chartered Institute of Management Accountants). Practitioners with these letters after their name will be regulated by those organisations and have to keep up to date with legislation through CPD (Continued Professional Development). Accountancy firms that display the logos for these organisations won’t necessarily have every member of staff qualified, but everything will have to be approved by a suitably qualified individual.
What will they charge?
It is often said that accountants are one of only 2 professions that has their own tartan… with very big cheques! (The other profession being lawyers of course) and this can be the case. The qualifications we spoke about above don’t come easily or cheaply and you are paying for expert advice.
Prices vary wildly but you can expect to pay anything from £15 per hour for a book keeper and an accountant's fees for doing your year end accounts. Tax work can start at £500.
As a general rule of thumb, the larger the accountancy firm, the more they will charge. Some of the larger firms will quote large prices for small firms accounts as they don’t really want to do them. A large firm is good if your accounts are more complicated as they have more resources and specialists at their disposal. Smaller, independent firms can often give you a more personalised service.
Always shop around for the best price, but money is not the only consideration…
What questions should I ask them?
Yes you want the price to be right, but you want the service to be right too, so I would recommend that you ask these questions…
• What does the price include and not include? For example, does it include your own self assessment tax return as well as the corporation tax return for the company? For payroll, does the price include doing the year end return as well as the monthly processing? Will the price increase with the number of employees the business takes on?
• Are there any conditions attached to the quote? i.e What do they expect you to do each month and each year?
• Do you have any specialist knowledge of my industry? This is especially important if your industry has any specialist rules like the Construction Industry Scheme, IR35, or if you have other complications such as foreign currency transactions.
• Who will be my point of contact and can I contact them with queries or will you charge me extra for that? you never know when you will need some extra advice or when a mysterious letter may arrive from HMRC. Will someone be available to assist you on an ad hoc basis?
• Can you provide client references or testimonials? There is nothing wrong with asking for references and a good practitioner will be happy to provide them. Many will include client testimonials on their website.
Where can I find an accountant or book keeper?
You can do an online search, use the yellow pages, or contact the professional bodies mentioned above, (ICAS, ACCA, CIMA, IBA) but a recommendation from a trusted source is always a good place to start. If you know someone who has their own business and uses an accountant or book keeper ask them for a recommendation.
Your Business Gateway Adviser can provide you with a list of local accountants and book keepers if you wish. We don’t recommend them as such, but we do know they are happy to work with new start businesses so that you can give them a call and get a quote.
Where can I find an accountant that isn’t boring?
Possibly hanging out with the yeti and the Loch Ness Monster…only joking. Accountants come in all different guises and having one who you can talk to openly about your business affairs to get honest and practical advice and guidance is the ideal scenario. You might even find a 'cool' Accountant like this one below...
To give you an intoduction to book keeping, Enterprise and Business Gateway run a number of workshops over the Grampian and Tayside regions, and you can book on these FREE workshops here
You can also phone your local Enterprise and Business Gateway office for advice on book keeping and accountancy for your business, they will offer objective and practical advice:
Grampian: 01224 289725
Tayside: 01382443400Back to blog