Honestly, how difficult is it to keep your own accounts?

[escapeUK]

Honestly, how difficult is it to keep your own accounts?

More difficult than 1.1/2 hours of my time a month, which is what my accountant costs.

Is it really worth doing it yourself?

[monkeygeorge]

More difficult than 1.1/2 hours of my time a month, which is what my accountant costs.

Is it really worth doing it yourself?

We all put different values on things, it's very much a personal thing, I've looked at what's involved and it really is very simple stuff. I'm in a position where I can spare an hour or two a month so for me it makes no sense to pay someone to do it.

However, I will pay £10-£15 a week to have my dry cleaning done. To other people who are happy to iron themselves that sounds ridiculous, but because I hate ironing and it takes me ages, I personally consider it's worth paying for.

[IR35 Avoider]

I'm paying £70 a month to a highly automated accountant (seem to recall that the name gets moderated out if I mention who they are) and am keeping things very simple with my new company. Once up and running, there is zero paperwork. Once a month I enter my invoice information into their web-based accounts system, and click a button to email the invoice to the agent. Once a month I record my salary in their system and record their monthly invoice (emailed to me) as an expense. Once a quarter I confirm (within the system) that the records are up-to-date, and they file the VAT return online. At all times I can see the exact status of everything, VAT owed, Corporation tax owed, money available for dividends, etc.

[DeludedAussie]

I'm paying £70 a month to a highly automated accountant (seem to recall that the name gets moderated out if I mention who they are) and am keeping things very simple with my new company. Once up and running, there is zero paperwork. Once a month I enter my invoice information into their web-based accounts system, and click a button to email the invoice to the agent. Once a month I record my salary in their system and record their monthly invoice (emailed to me) as an expense. Once a quarter I confirm (within the system) that the records are up-to-date, and they file the VAT return online. At all times I can see the exact status of everything, VAT owed, Corporation tax owed, money available for dividends, etc.

who are they?

SJD?

[css_jay99]

Using an accountant or not, I think it is important that people should at least learn some book keeping and accounting skills.

After all running a business is not just about services you output but also about how to interpret accounting data, effectively manage your resources ............

.... Maybe if the RBS boss & other Fat Cats knew this, we tax payers might not be paying such a hefty price


css_jay99

[IR35 Avoider]

who are they?

SJD?

Crunch Accounting

[d000hg]

Why not TRY doing your own accounts for a year WHILE still using your accountant? Compare the results, see if there's more to it without losing the safety net.

[sy8111]

More difficult than 1.1/2 hours of my time a month, which is what my accountant costs.

Is it really worth doing it yourself?

Personally I feel using accountant involves more than just sitting their waiting for them to do their work. I have to keep communicating with them by email, phone and post or email required data. Also, I still have to maintain copy of all information myself. So I feel that I still need to spend a couple of hours every week or month with accountant hired.

I am thinking staying with them for 1 year and do accounting myself as well. I can do it all alone after everything is clear.

[rd409]

I am very new to contracting, and even though I have a bit of accounting knowledge, I would not try doing it myself. The moment you work through your limited company, the liability of completing all tax matters is upto you anyways.

What I would suggest is as follows:

1) Get a list of documents you need to prepare quarterly, and annually.
2) Get a list of supporting documents that you need for the above, and a list of agencies/authorities, you need to file those documents with.
3) Get a list of sources you can trust, to get most updated formulae for calculations of various taxes.
4) Start calculating all the taxes yourself and see if the final figure matches what your accountant suggests.
5) If not, ask your accountant, why? Most of the professional accountants would be more than happy to explain why not.
6) If your figures matches to that of your accountant's for a few months, figure out the time taken by yourself to complete all the formalities and derive what it costs you as per your hourly rate.
7) Finally, ask yourself what the motivation is behind doing everything yourself.
8) If the motivation is money, then add to the cost calculated in step 6, the fees of accountant to do you Self Assessment at the end of year + Fees of accountant in case you need consulting + Some money put aside for penalties in case you mess up things (This can be your savings if you dont need it).
9) Then compare the costs, and see if it worth it? Mind well, time taken to fill out forms can vary hugely between individuals, and it can only be you, who knows how long does it takes you.

Hope this helps.
Rasesh.

[sy8111]

Your suggestion is absolutely valuable to people who want to do self-accounting. One more point I want to make is that, although basically we should compare time value we spend on self-accounting (monthly rate x 1 month) with time value we deserve (hourly rate x hours in a month), we also notice that the time we spend on accounting is in our spare time.

Some people may think value of spare time and value of professional time are quite different, and if they don't do accounting they sit there watching soap or big brother. They may find that piece of time is not so valuable and can exchange for accountancy fee saving.

So it also depends on how you view your spare time.

I am very new to contracting, and even though I have a bit of accounting knowledge, I would not try doing it myself. The moment you work through your limited company, the liability of completing all tax matters is upto you anyways.

What I would suggest is as follows:

1) Get a list of documents you need to prepare quarterly, and annually.
2) Get a list of supporting documents that you need for the above, and a list of agencies/authorities, you need to file those documents with.
3) Get a list of sources you can trust, to get most updated formulae for calculations of various taxes.
4) Start calculating all the taxes yourself and see if the final figure matches what your accountant suggests.
5) If not, ask your accountant, why? Most of the professional accountants would be more than happy to explain why not.
6) If your figures matches to that of your accountant's for a few months, figure out the time taken by yourself to complete all the formalities and derive what it costs you as per your hourly rate.
7) Finally, ask yourself what the motivation is behind doing everything yourself.
8) If the motivation is money, then add to the cost calculated in step 6, the fees of accountant to do you Self Assessment at the end of year + Fees of accountant in case you need consulting + Some money put aside for penalties in case you mess up things (This can be your savings if you dont need it).
9) Then compare the costs, and see if it worth it? Mind well, time taken to fill out forms can vary hugely between individuals, and it can only be you, who knows how long does it takes you.

Hope this helps.
Rasesh.