Doing the books yourself or not?

[Malteaser]

Would you run your own accounting for a ltd co, or would it be best to leave it to someone else?

I am capable or should that be willing to learn how to keep the books and indeed have done for the past couple of years for a basic limited company just using Sage. But I hasten to add this hasn’t been based on IT rates, i.e. I need to learn about the options available e.g. dividends; if that is the best way etc. (I am researching as I ask as to what is best?)

Previously, I used a company to handle all of the paperwork, and it was handy to have a company that I could also direct requests for references too, but I wasn’t overly happy with their service.

What am I letting myself in for if I can do it myself, or are people wincing and saying don’t do it?

[Gonzo]

What am I letting myself in for if I can do it myself, or are people wincing and saying don’t do it?

You will find both schools of thought on here.

Some think that it is easy for them to do themselves and they are too tight to pay anyone else to do it for them.

There are others that think it is well worth paying someone else to do it for them .

hth

[r0bly0ns]

It all depends how much your time is worth.

Any time spent doing your own accounts means time you are not billing your clients for

[Sockpuppet]

Any time spent doing your own accounts means time you are not billing your clients for

I disagree with this train of thought.

That assumes that 100% of your time is productive. I.e. you have no slack time.

I do my accounts and it takes 1 hour a month and another 3 at year end.

So that's 15 hours a year. My accountant wanted £900 a year so thats £60 an hour.

Even if you get paid over £60 those 15 hours don't stop me billing clients 15 hours. I just do it when I'm watching a film or something else at home. I can't honestly say I don't waste over 15 hours a year.

[Gonzo]

I rest my case

[malvolio]

I rest my case

Yep, agreed.

My rationale is that you have work time and personal time. Work time pays you money so you can enjoy your personal time. Spending personal time on work therefore costs you double; you are using personal time to do productive work that you can't charge for, and you are not getting the benefit of the time itself

So if you were to spend an hour a week, or let's say 50 hours a year, on bookeeping and record tracking and cross-checking and keeping up with relevant legislative, financial and procedural changes and usually charge £40 an hour, you're spending £4k on accountancy. My accountant is one of the more expensive and charges me around £1500 a year. So which option is the cheaper one?

Plus if he makes a mistake and costs me money, he pays for it. Can't remember the last time someone sued themselves for negligence...

By all means do your own books if you wish, but let's lose this idea that it saves money. It doesn't.

[xoggoth]

Jeez, 3 hours to do final accounts. It always takes me ages to get balance sheet that sorta balances.

PS You make being tight sound like it is not a virtue.

[chris79]

I do all my own accounting, book keeping, PAYE and sometimes even hold a little shareholders meeting to declare a dividend if I feel in the mood. It's not rocket science, and as long as you are diligent enough with the paperwork, HMRC correspondence and requests etc, then it shouldn't be a problem. You could always do a half and half approach though, do all your own book keeping, payroll etc, then just pay an accountant to do your year end accounts / CT600.

[Sockpuppet]

You could always do a half and half approach though, do all your own book keeping, payroll etc, then just pay an accountant to do your year end accounts / CT600.

Bingo! Except mine is an old uni mate who charges a few beers.

[malvolio]

Well clearly those three years' Cost Accountancy training and work as a Manegement Accounting were wasted then. I've been getting wrong for the last 30 years...

It's a business, you run a P&L (although you may not recognise it as such), it is cheaper (and possibly less business risk) to use an accountant, end of discussion IMHO.

Doing it yourself is not more efficient, nor cheaper. It may give you a better sense of being in control, which is fair enough except that is largely illusory unless you are an accountant. For example, where do you stand on protecting yourself from the proposed FBT provisions, how are you aiming to answer Q6 on the P35/SA forms, do the changes to CGT and capital relief affect your purchasing plans, what is the impact on your net salasry/dividend split by the change to the 10% tax band....?