If you own a small business it’s easy to get caught up in doing bookkeeping yourself to try and save costs. However, when you have lot to do this can eat into your free time, and it’s probably not your favourite way to spend your weekends.
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:
- Talk to your accountant
Ask your accountant what you can do to lower your accountancy fees. The aim is not to take on more work at the expense of your weekends or family life. Most accountants do offer packages and it might be that you can 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.
- Get a format agreed
If you’re happy to do the books, then agree the format with your accountant. For example, should you to simply keep record of income and expenses on excel? Do they want you to use a particular software? Do they want you to reconcile the books by applying “Double Entry” bookkeeping? 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 bookkeeping services
You can use a professional bookkeeper to prepare the books. Fees will be lower than an accountant’s. Shortlist a few and involve your accountant in the process if possible. 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 cheaper rate. Or the bookkeeper and the accountants use different systems.
- Make records as simple and streamlined as you can
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).
- Use 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.
- Use Cloud Bookkeeping
FreeAgent, QuickBooks, Xero and the like, have transformed how bookkeeping is done. If you do it yourself use one of these platforms to save time and accountancy fees. Some accountancy firms may even cover the cost within their packaged services. Again, agree with your accountant where your bookkeeping duties would end.
- Use automation where you can
You can now 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, then this should be analysed as insurance. Imagine how much time and fees you can save by doing this. However, don’t assume everything will be correct. It will need checking.
- Pick a good time to send in your records
Did you know you can ask for a lower accountancy fee if you prepare your books for your accountants at their quietest times? 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.
- EPOS integration
If you run a retail or restaurant business and you’re using a cloud bookkeeping platform, then 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. A key area that often causes issues with the accounting process is the value of your stock. Where you or your accountant spends less time on this area, you can both save time and costs.
Make use of workshops from HMRC and the free videos from reputable accounting firms to enhance your knowledge.
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