This is a question a lot of contractors and small business owners ask before they engage an accountant – can I do this myself? The honest answer is yes, you probably can. It almost certainly won’t be as easy as you think, it will take more time than you want it to and it’s likely to cost you more than you save in time and errors, but you can probably do it. The real issue is that “doing your accounts”, as in “ticking off an admin task” isn’t the main reason you need an accountant.
Even if you can, do you really want to?
On one level, you can think of hiring an accountant as outsourcing a series of tasks to a specialist expert. You might be able to perform these tasks yourself, but even if you can your time is probably better spent elsewhere, and worth more than you’d save in accountancy fees.
As a business owner, your attention and time is constantly split between a range of different priorities, which means it’s very easy to make an error or miss a deadline in your DIY accounts, and mistakes like that can be expensive.
For most business owners, putting this complex and time-consuming work in expert hands is a sound decision in its own right, even if this is all your accountant can do for you.
Your accountant as a business resource
A really good accountant is not only a contractor to outsource work to, but also a partner that you hire to help you succeed. They’ll obviously take on all those accounting tasks, freeing up your time and saving you money, but the real value of hiring an accountant lies in their expertise.
The right accountant can help you really understand your business numbers and also make your future planning and forecasting more useful and accurate, giving you the insight you need to make sound decisions and carve a straighter path towards your goals.
What does an accountant really cost?
The decision about whether to DIY your accounts should, like other business decisions, be based on an analysis of the cost and benefit. So, if you made the decision not to hire an accountant, what will that save you?
Your business will save 19% of accountancy fees by offsetting against corporation tax, and if you’re VAT registered you can reclaim the VAT. So, on typical monthly accountancy fee of £120 plus VAT will actually cost around £100 a month.
You would then need to factor in the cost of doing the work on your own, including any time taken away from paying work, and the cost of any training you might need. For example, tax rates and allowances change on an annual basis, and if you DIY your accounts you’ll need to keep up.
Other things to look out for
Many accountants will provide free access to accounting software, which could make your life much easier, and would be a substantial extra cost if you go DIY.
A trained accountant will know about and understand allowances and reliefs that you may not be aware of. These could save you considerably more than you spend in accountancy fees.
If you try to DIY your accounts and it doesn’t work, it could take a lot of work for your accountant to untangle them when you decide to get help after all. Depending on your accountant, this can cost you more than it would if you’d engaged an accountant in the first place.
If you have questions or if we can help in any way, please call our expert team on 01296 468483 or email info@orangegenie.com.