Do I need an accountant (UK based business)?
Howdy all, first post here.
One of my business mentors suggested doing all of my own accounting for the first year in business, so I fully understand all of the cashflow etc.
That said, my biggest fear is basically missing something on a tax form and getting sued by the government (or some other critical mistake).
What are the odds of this? Do you have any recommended resources for those wanting to learn the ins and outs of finance and accounting, and what is the risk of getting some massive fine that would outweigh the cost of the accountant?
I'm not worried about the price of the accountant, as much as I want to learn how the business financing works.
Every businessman needs an accountant I re-phrase an honest accountant.
Hire an accountant, not just a bookkeeper. In your initial discussions, indicate you want to create a business partner relationship. Good accountants also assist with business decisions you may want to make as you run your operations.
My experience, if you are not familiar with accounting and bookkeeping, you will create more problem for the accountants to fix.
A good accountant will also be willing to go through your financial with you. Thus giving you a good understanding of your operations.
Although there are many "cloud accounting" tools out there that does cater to non-accountants. You should stick to what you know best.
Depends on whether you have the time and accounting skills.. It is something that has to stay organized and you don't want it to take away from what you need to be doing to maintain the business itself. If you do choose to do it yourself there are some great software, such as quickbooks, that can track everything. It also depends on payroll, etc.
I always recommend engaging an Accountant from an early stage. It is not just that he knows about accounting and tax, but he will know other businesses who may prove to be useful contacts. Think beyond the cost of his fees and any tax 'saving.' Look at the broader benefit he/she can be to you.
Hey Ryan, hope you are doing fine.
Since you have no problem with the cost of an accountant, you can get an accountant to work for you, on a part-time basis. Specifically in areas where you need help most. like Taxes and regulation.
Alternative to this, you can start reading online I'm sure there are lots of publications and online info regarding taxes and statutory requirements when it comes to doing business in UK.
check the link below
Hello Ryan. The key phrases in your post are:'my biggest fear is missing something on the tax form' and 'I want to learn how the business financing works'.
.If you hire an accountant to do your first year's taxes you will understand the tax process, even if you never do your own taxes. If something is missing on the tax form, the accountant has signed that s/he prepared the form and s/he is therefore responsible.
You 'd better hire an accoutant (to do the accounting and tax compliance).
I could recommend you one (based in London) if you want to.
Elaine has pointed out the reality that exists in the industry. Since you cited that you're for the first year in business, you'd probably want to make sure that everything goes in a right way. Understanding the concepts of accounting is not just an easy thing that can be covered up instantaneously.
You will want to get a better counsel to assure that you are not in the peril of getting penalized with the very first submission. The best option to move with is you can look for an assistance from a professional who can take care every single action that happens in your financial statements as well he / she should also possess a thorough knowledge in devising the filings.
If you're still searching for any UK based accountants, you can reach out - www.tallyaccountants.co.uk . They are the team of London accountants who keep serving the businesses in force.
Good luck Ryan!
I have read alot of the answers so far and they all look good. So the biggest question for you is what is most important.
I highly doubt you would be subject to a big tax bill unless you were trying to hide something or doing something illegal.
And the answer also depends on how big is your business? Does it have hundreds and thousands of entries - or is it pretty basic.
Does it involve Real Estate? Are you selling goods in the US?
What kind of business do you have?
You would want to start from there to really get the answers you need
Would your business mentors recommend setting your own broken bone, just so you can understand how the arm works? Does that actually give you any valuable insight, or simply open you up to more risk?
Unlike others, I will say that it is one of the worst and most dangerous things for a business to try to handle this on their own. The rules are complex enough, the penalties harsh enough, and the cost benefit does not make sense.
To counter some of the other comments which are not accurate:
1. Most accountants working with small business are recommending QuickBooks (and QuickBooks online), not Xero. This is simply statistical information, as both products are viable, but QuickBooks is more scaleable.
2. There are enough mistakes that you can make before opening the proverbial doors, which can be avoided or mitigated by engaging with an accountant early. Statistically, those businesses who work with accountants are disproportionately more successful.
3. You do not need a "business coach". A quality accountant who focuses on working with entrepreneurs are usually effective "business coaches". As with accountants, check credentials. Most business coaches are a jack of all trades, master of none, and some are downright dangerous. I have had clients come to me with all types of ridiculous and/or dangerous advice, even from reputable organizations made up of former executives for example. The ones who are good, a small business cannot afford.
4. Do not use a bookkeeper. Go with a firm who has licensed accountants (in UK a Chartered Accountant for example). Independent bookkeepers have invariably caused more problems than they are worth. In every case I have ever encountered where a client was using an outside bookkeeper, there were significant and material mistakes.
If you take all of the above together, it's about avoiding the pitfall of being penny wise and pound foolish. Hire the right people, with the right experience and skills for the job, because it will always cost you more to fix it later. Being cheap up front is never the solution.