"Basic" Packages from Accountants

[philip@wellwoodhoyle]

Just an idea, maybe you should give spreadsheets (without formulas but with the structure you want) to your non-full-package clients to enter the data. And when they submit their work towards the end of the year, you can just copy the data (like for like - column for column and row for row) in you original spreadsheet (with formula). And you will get the correct figures youwant.

Yes, like all the other contractor-specialist accountants, we do offer our own basic spreadsheets free of charge (to anyone, not just clients), and we also offer access to a free online accounting ledger-based system which handles invoicing, VAT returns etc. There are payroll systems to buy for as little as £50 per year or maybe less on a "per payslip" basis on the internet. So in theory, a client can equip themselves with all the necessary systems for virtually no cost, and we do try to "steer" people in the right direction according to their own circumstances. Trouble is, a lot of people want to do it their own way - using their own (inadequate) database or spreadsheets, or surprisingly continuing to use hand-written cash books, and even using the right tools, people still enter figures wrongly, put things in the wrong place, etc. If someone has the time and inclination to do their own book-keeping properly and is willing to pay for advice on book-keeping, control accounts and reconciliations, and other relevant accountancy issues at the outset, then they can do, and will probably save accountancy fees in the long term, although probably pay more in the first year. The problem areas are where people think it is easy and do their own thing, not realising they need initial advice and training, and then the time and accountancy fees escalate to put things right afterwards.

[PAG]

Agree 100% with Alan from Nixon Williams.

We do offer an alternative to the "standard" monthly "we-do-everything" packages but usually the client pays around the same, maybe even more sometimes. Our monthly packages are worked out at a much lower charge-out rate to account for us being able to systemise and plan our workloads far more efficiently, so less waste and down-time, therefore lower charge out rates.

It sounds crazy, but it really often does take more time to assemble all the information and documents from clients, then try to work out what has been done and how figures have been arrived at for VAT returns, payroll etc., and then correct as necessary.

Not just for IT contractors, but for other business types as well, it is often more efficient to re-write the books ourselves rather than try to make sense of other peoples' attempts, especially when they try to use spreadsheets - anyone who has had to try to correct a spreadsheet with @sum equations that don't include the whole column, numbers entered as text which don't add into the totals, cross-referencing to a wrong figure, adding figures individually and forgetting to change the formula when a new entry is made, inserting new columns or rows and not correcting the formula, etc., will understand!

I hate it when a potential new client tells me they just want me to do the annual accounts and tax returns and that they'll be doing the book-keeping, VAT and payroll themselves - 90% of them will make a botch up of the basics and then complain about our fees being more than quoted when we have to sort out the mess or our time in having to answer dozens of basic questions about how to do the basics. That's why we prefer the "full package" - it takes more time, but that time is better controlled and more fruitful in advising the client, rather than spending time on sorting out problems after the event instead of tax and business planning.

Just an idea, maybe you should give spreadsheets (without formulas but with the structure you want) to your non-full-package clients to enter the data. And when they submit their work towards the end of the year, you can just copy the data (like for like - column for column and row for row) in you original spreadsheet (with formula). And you will get the correct figures youwant.

[philip@wellwoodhoyle]

Agree 100% with Alan from Nixon Williams.

We do offer an alternative to the "standard" monthly "we-do-everything" packages but usually the client pays around the same, maybe even more sometimes. Our monthly packages are worked out at a much lower charge-out rate to account for us being able to systemise and plan our workloads far more efficiently, so less waste and down-time, therefore lower charge out rates.

It sounds crazy, but it really often does take more time to assemble all the information and documents from clients, then try to work out what has been done and how figures have been arrived at for VAT returns, payroll etc., and then correct as necessary.

Not just for IT contractors, but for other business types as well, it is often more efficient to re-write the books ourselves rather than try to make sense of other peoples' attempts, especially when they try to use spreadsheets - anyone who has had to try to correct a spreadsheet with @sum equations that don't include the whole column, numbers entered as text which don't add into the totals, cross-referencing to a wrong figure, adding figures individually and forgetting to change the formula when a new entry is made, inserting new columns or rows and not correcting the formula, etc., will understand!

I hate it when a potential new client tells me they just want me to do the annual accounts and tax returns and that they'll be doing the book-keeping, VAT and payroll themselves - 90% of them will make a botch up of the basics and then complain about our fees being more than quoted when we have to sort out the mess or our time in having to answer dozens of basic questions about how to do the basics. That's why we prefer the "full package" - it takes more time, but that time is better controlled and more fruitful in advising the client, rather than spending time on sorting out problems after the event instead of tax and business planning.

[malvolio]

Yes, we do. No problem with that but I'm running a business (a small one, admittedly) and prefer to think like one. My point, though, is to highlight that simple money paid out is not the criterion you should apply, and as Alan said earlier, an accountant will only repeat all your good work at year end anyway, so why not let them do it all?

[martinb]

Sorry but this whole attitude kills me. Work out how many hours a year you spend doing all these fiddly little tasks like record keeping and payroll, remembering to include some time for keeping up with legislation changes and budgets, and some more time keeping track of all the bits you have to send in. Double it, because while you're doing this work you're not earning and you're not having time off either. Mulitply it by your hourly rate. For the average contractor, it comes out at around £2k a year. Even the most expensive accountants we suggest don't get close to that.

We will agree to differ. I'm not claiming everyone would want to do this. But I don't think the admin time I spend is significantly more than you would spend filling in a spreadhseet or providing documentation to your accountant. PAYE takes literally 10 minutes a month. VAT takes about 10 minutes a quarter.

And whilst I understand the logic about time taken from doing other things, I do this kind of thing during moments when I would otherwise simply be watching crap on the TV, so I don't feel its really costing me anything at all.

I could pay someone to wash my car too, but I don't. I can do it myself even though it takes time. At the end of the day it comes down to personal preference - and we simply have different preferences!

[hyperD]

Are there reasons such as having a stamp from a reknown and qualified accountants compared with Joe Blogs that would reduce the chances of having your returns scrutinised more by the HMRC?

[malvolio]

No logical reason to double it, but nice try!

No reason other than four years Cost Accountancy training and 30 years running P&Ls up to around £17m a year. But what do I know.

Even so, don't double it and it's £1k a year, as opposed to the £1020 fees the most expensive of our regulars charges. For £20 a year, I'd rather be in the garden myself.

[Euro-commuter]

Work out how many hours a year you spend doing all these fiddly little tasks ..... Double it, because while you're doing this work you're not earning and you're not having time off either....

Very clever, but doesn't wash. You are doing this (in Robert Townsend's memorable phrase) for fun or profit. If it is fun (OK just covering all the cases) then you are having time off. If it is for profit, i.e. to save money on accountant's fees, then it is work: calculate it at single time and you'll see whether it was worth doing or not.

No logical reason to double it, but nice try!

[Nixon Williams]

From our point there is little saving if any of a client doing some of the work, any decent accountant would check what you have done anyway and so there is no cost saving.

Our systems are geared up to keep on top of the affairs each month and this eases the whole process.

Alan

[dmini]

Generally I agree. My accountant is a friend, who has done my personal returns for years free, coffee and cakes provided by her, so I felt obliged to let her do my company stuff, initially at least, and the more I do the less I paid, so tended to do more myself, as encouraged by her.
BUT I don't do the forms, I pay my hubby to do them! As far as I can see, this is tax efficient, and keeps him out of mischief. I just gave him my timesheet today, he produced the invoice & sent it off. I dont have to do anything! He's done the accounts spreadsheet, VAT return, etc. I will fill in my expenses tonight, and he will process everything. HMRC cannot complain about anything I pay him - as he is doing the work, and the pay is within the accepted limits.

I still rely on my accountant to keep me up to date on any HMRC tweaks, give me advice on expenses etc, and make sure everything gets submitted on time!

[rootsnall]

In my early days of contracting there were quite a few 'local' accountants who just billed you for the work done and you could just get your annual accounts completed I guess. However I think you'll struggle to undercut the monthly packages out there by much and its just not worth the hastle.

[malvolio]

Sorry but this whole attitude kills me. Work out how many hours a year you spend doing all these fiddly little tasks like record keeping and payroll, remembering to include some time for keeping up with legislation changes and budgets, and some more time keeping track of all the bits you have to send in. Double it, because while you're doing this work you're not earning and you're not having time off either. Mulitply it by your hourly rate. For the average contractor, it comes out at around £2k a year. Even the most expensive accountants we suggest don't get close to that.

[dmini]

Yes
I'm running this approach at the moment, in my 1st year of ltd - know two accountants who do this. Just ring up normally if I have any questions, get an answer quickly. Suppose they might get round to billing me at some point

[martinb]

The commonly recommended accountants on this board (ie Nixon Williams, SJD, 1stAccountancy) all provide an "all in" service for contractors for about £65-£70 per month.

However, there seems little alternative to this all in service. Personally I'm happy to do PAYE, VAT, P35's, P14's etc myself - frankly it's a doddle and takes little time and therefore I just don't see the need to pay for it. (I accept this isn't everyone's view).

The only thing I want an accountant for is doing end of year and completing Corporation Tax returns, and occasional ad-hoc advice during the year. Do any others take this approach and who do you use? (It doesn't seem to be an option with SJD, Nixon, etc)