By Jonathan Amponsah CTA FCCA, The Tax Guys
You have a small business and you want to keep costs low including bookkeeping and accountancy fees. But gradually those pesky invoices and receipts begin to take up your evenings and weekends. Bookkeeping isn’t your favourite job. You don’t have time to spend hours on the books. Neither do you have a large bank balance to pay high hourly rates for accountants – and getting them to sort through the shoe box of receipts is certainly not a good way to spend your money. So how do you strike a balance and prepare your books correctly in order to reduce your accountancy bills, without it eating into your weekends?
Here some way to save time and money:
- Ask your accountant
Ask your accountant what you can do to lower your accountancy fees. Most accountants do offer packages and you might get the year-end accounts and tax return work at half price. Or they could simply take over all your paperwork chores, produce regular management accounts and handle your VAT and payroll requirements. In return you get your end of year accounts done and filed for FREE. If the bulk of the work is completed and there are no additional complications or work at the year end, I see no reason why the accounts cannot be filed at no cost to you.
- Agree the Format
If you’re happy to do the books, agree the format with your accountant. For example, should you simply keep records of income and expenses on Excel? Should you use a particular software? Unless you are a professional bookkeeper or a member of the Institute of Certified Bookkeepers, please do not attempt double entry bookkeeping. You may end up paying for the accountant to rectify errors. You may even end up with some tax issues.
- Use a Bookkeeper
You can use a professional bookkeeper to prepare the books. Fees will be lower than an accountant’s. Involve your accountant in the process if possible and come up with a shortlist. You want to avoid a situation where you pay for the same work twice because the format and quality of the bookkeeping is not at a level to enable the accountant to produce the accounts at a better rate.
- Streamline Records
Whether you use an accountant, a bookkeeper or do it yourself, avoid complicated record keeping and streamline your transactions. Things you can do include having a dedicated business account, using the bank for most transactions, avoid using the business bank account for personal expenses, avoid multiple bank accounts or credit cards and have all your records in once place (preferably in a digital format).
- Receipt Capture System
There are some good apps including Auto Entry and Receipt Bank that allow you to capture these receipts on the go and send them directly to your accountant. You can even ask your suppliers to send their invoices to the app to free up your inbox a bit.
- Cloud Book Keeping Platform
FreeAgent, QuickBooks, Xero and the like have transformed bookkeeping. You can use one of these platforms to save time and accountancy fees. Some accountancy firms may even cover the cost within their packaged services, just agree with your accountant where your bookkeeping duties end.
- Automate Transactions
You can authorise your bank to send bank transaction to a cloud bookkeeping platform. You can also set a rule to say that if a direct debit payment goes to, say Aviva, this should be analysed as insurance. You can save by doing this. However, don’t assume everything will be correct. It will need checking.
- Handover your records at a quiet time
Accountants have peak times as many businesses have December & March year-ends, plus the Tax Return deadline in January. Avoid these times and ask your accountant if you’ll get a discount if you send in your books before the rush.
- Industry Apps That Integrate
An area that often causes issues with the accounting process is the value of stock. If you run a retail or restaurant business and you’re using a cloud bookkeeping platform, why not go a step further and get an EPOS (Electronic Point of Sale) and inventory system that integrates with your chosen cloud platform and helps you keep track of stock? Platforms such us Vend, Izettle and others should be considered.
Finally
Always try to get the best deal from your accountants but also remember they can add value to your business so do your part well and get them to spend more time on business advice/tax planning.
ABOUT THE AUTHOR
Jonathan Amponsah CTA FCCA is an award-winning chartered tax adviser and accountant who has advises business owners on entrepreneurial tax reliefs. Jonathan is the founder and CEO of The Tax Guys. www.thetaxguys.co.uk