FAQs when thinking of hiring an accountant…Jason Firmager
Thinking about accounts can certainly be daunting, and the actual process of sorting out your papers, receipts, invoices and keeping your books is far from fun for the most of us. A question many of us ask as we are tiptoeing gingerly into the world of self-employment is, is there any point in having an accountant? Even if you are competent with your numbers, if your business grows as no doubt you want it to, then you will have less time and more accounts to juggle. Doing your own accounts can be quite straight forward initially, however just like any profession there are tricks of the trade that only fully qualified and experienced accountants would know about. It’s just like all of the people that would attempt to give a friend or partner a back massage, whilst it may be pleasant or relax the person, it is certainly not a long term fix for somebody suffering with more serious problems, it is a job for a professional massage practitioner. The fact is, you probably do not need an accountant, as you are fully capable of doing a decent job, just like the massage example, however it is not just about doing okay, it is about doing a good job, so getting a good accountant that can save your business more money than what they cost you to hire is a sensible business choice for most.
Here are some answers to frequently asked questions that will help you with deciding to commit to getting an accountant as a sole-trader:
How much will an accountant cost me? Just like prices of treatments vary from one therapist to the next, so does the cost of an accountant, but some accountants are happy for you to pay your fee as a standing order per month.
What does my accountant need? Your accountant will need all receipts, as proof of payment for any item or service that you have paid out for in order to facilitate your business. It is worth putting this in an envelope at the end of each month, so that you can help your accountant organise your papers. They will require bank statements and any other paperwork relating to your earnings.
Does my accountant need to be qualified? It is advised to use a fully qualified accountant, as they have undertaken the relevant study, passed numerous examinations and had extensive practical work experience before qualifying. They also undertake compulsory continuous professional development (CPD) to ensure their knowledge is up-to-date, and their skills are maintained. They adhere to rules relating to ethical and professional conduct, and they monitored by their professional body.
How do I know the accountant I choose is qualified? Qualified chartered accountants will have ACA or FCA after their name or as part of their business information; and chartered certified accountants are identifiable with the letters ACCA or FCCA.
How do I find a qualified accountant? Go by personal recommendation or you can also visit Institute of Chartered Accountants in England and Wales (ICAEW) icaewfirms.co.uk.
What’s the difference between a bookkeeper and an accountant? The job of a bookkeeper is to make sure all the financial transactions are properly logged and recorded. An accountant can then review your financial position and make appropriate recommendations on how to run your business more profitably. You can keep your own books, employ a bookkeeper or your accountant can do it for you.
What else can an accountant do for me? An accountant will use their skills and knowledge to enable you to conduct your business smoothly and efficiently. They can provide advice prior to your setting up your business, offering continual financial advice, including advice on managing your business; planning and managing growth; preparing your VAT returns (if you’re registered for VAT); taking care of your year-end accounts and calculating how much tax and National Insurance you owe HMRC; giving you advice on minimising business tax by making full and proper use of your allowable expenses; and handling any enquiries with HMRC over your tax or VAT on your behalf.
Ultimately, it is a great idea to have a grasp of all aspects of your business and what is now expected of you as a self-employed business person, but by employing an expert to do your accounts, means that you can free up space in your mind and in your diary to concentrate on bringing in new clients and encouraging existing ones back… it’s a case of let the accountants do their job, to help you do yours.