Key Learning

  • Avoid unnecessary confusion by establishing with you accountant exactly how they want you to keep your books
  • Consider using a professional bookkeeper
  • Have a dedicated business account and refrain from using it for personal transactions
  • Cut the cost by sending your accountant your books in months other than December and March
Jonathan Amosh Tax Guys

You may have noticed that receipts and invoices pile up very quickly and can start to take over your evenings. When you have a lot else to do it’s hard to fit in doing the books as well, plus you don’t want to pay high hourly rates for accountants to sort out basic paperwork. So how do you balance preparing your books correctly in order to reduce your accountancy bills, without it using up your evening and taking away your social life? The Tax Guys' Jonathan Amponsah shares some tips to save precious time and money:

Ask about lowering your fees

This might sound like asking a hairdresser if you need a new style but the first thing to do before you jump into preparing your books is to 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. Why free? Well if the bulk of the work is completed and there are no additional complications or work at the year end, then I see no reason why the accounts cannot be filed at no cost to you. 

 

Get a format agreed

If the above doesn’t work and you’re happy to do the books, then do agree with your accountant what format to keep the books and how they want it done. Do they want you to simply keep record of income and expenses on excel? Do they want you to use a particular software? Would you match, cross reference and analyse the transactions or would they do it? Do they want you to keep a cash book, list of your sales and purchase invoices? And do they want you to reconcile the books by applying what is called “Double Entry” book keeping? Unless you are a professional book keeper or a member of the Institute of Certified Book keepers, please do not attempt to do double entry book keeping. You may end up paying for the accountant to rectify errors. You may even end up with some tax issues.

 

Use a professional

Another way to prepare the books and reduce your accountancy fees is to use a professional bookkeeper to help you. Their rates are certainly cheaper than that of an accountant. But do choose carefully. Shortlist a few and involve your accountant in the process if possible. What you want to avoid is a situation where you end up paying for the same work twice because the format and quality of the book keeping is not at a level to enable the accountant to produce the accounts at a cheaper rate. Or the book keeper and the accountants use different systems and speak different languages.

 

Keep things as simple as you can

Whether you use an accountant, a bookkeeper or do it yourself, avoid complicated record keeping and try to streamline your transactions. Things you can do include having a dedicated business account, using the bank for most transactions, refrain from 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 rather than a shoebox of receipts). 

 

Use Apps to capture receipts

There are some good apps including Auto Entry and Receipt Bank that allow you to capture 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. And this will also reduce your accountancy bill because accountants are not chasing you for records or sifting through a pile of invoices.

 

Use cloud platforms

Gone are the days when bookkeeping software was written in complicated language that only accountants could use or understand. The likes of FreeAgent, QuickBooks and Xero have transformed the way bookkeeping is done. And if you’re going to do your own bookkeeping, then do use one of these platforms to save time and accountancy fees. Plus some accountancy firms will even cover the cost of the platform for you or include it within their packaged services. Again, agree with your accountant where your bookkeeping duties would end.

 

Integrate EPOS etc with your cloud platform

If you run a restaurant or retail business and you’re using a cloud bookkeeping platform, consider going a step further and get an EPOS (Electronic Point of Sale) and inventory system – one that integrates with your chosen cloud platform and helps you keep track of stock. Look at platforms such as Vend, Izettle and others. A key area that often causes issues with the accounting process is the value of your stock. If you or your accountant spends less time on this area, you can both save time and costs.

 

Go on a free workshop

If you are registered for VAT and you prepare your own VAT returns, attend HMRC webinars on VAT, bookkeeping etc. or watch free videos from reputable accountancy firms to ensure that you’re not making costly mistakes.

Then make sure you give your accountant copies of the returns that were submitted, together with your workings showing how all the figures on the returns were calculated.

 

Automate Transactions

Open banking and artificial intelligence is taking away most of the heavy lifting when it comes to receiving your bank statements and analysing what the transactions are for. You can authorise your bank to send bank transaction to a cloud bookkeeping platform avoiding the need to spend time downloading them and keying them into, say, a spreadsheet. 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 so next time you don’t have to analyse it manually. Imagine how much time and fees you can save by doing this.  However, don’t assume that you can ignore it completely – it’s very important that someone check though to ensure that the robots are behaving the way you intended.

 

Agree dates when you’ll 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? Yes, you can. Accountants have peak times with many businesses having December & March year-ends, plus the Tax Return deadline

in January. So, avoid these times. Also ask your accountant “if I get my books all done in the format we’ve agreed and send them to you by say July will you give me a discount?”

Try and avoid asking your accountant to do things at the last minute. Many will charge a premium for putting you to the front of the line.

 

Finally

If you manage your bookkeeping well and have a good relationship with your accountants not only can you save money, you can also get more value from your accountants.  Make the most of the help they can give you with tax planning and other advice.  That will add much more value and help you grow your business.

Contributed by Jonathan Amponsah
Ashleigh Smith
Article by Ashleigh Smith
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