Do I need an accountant if I use Quickbooks or Xero?
A question that often gets asked is whether an accountant is needed if a business owner uses software such as Xero or Quickbooks. Well, the answer is….it depends! This FAQ will look at the various reasons why you might need an accountant, and the situations where you don’t. And sometimes it’s a case of ‘wanting’ an accountant rather than ‘needing’ one.
The adverts on TV are true – submitting a VAT return really is as simple as ‘clicking a button’. But do you know what you are submitting is correct?
Software certainly makes it easy to look at information and submit it to HMRC – whether that is collating figures for a self assessment tax return, or a VAT return. You could also consider submitting your own company accounts to Companies House! There is no legal requirement for the majority of small businesses to use an accountant. (Any businesses requiring an audit is a different matter, and not one we are covering today).
So what are some of the benefits of using an accountant?
- Peace of mind – you know that you will have someone helping you meet the deadline, preparing the correct data, and therefore less likelihood of an investigation with HMRC going pear-shaped.
- Saving money – this may seem wrong, because you are having to pay an accountant. But we have had situations where clients have filed their own company accounts and got them so wrong, not only did we have to charge them to redo the accounts, but they’d also overpaid Corporation Tax, or incurred penalties for doing them late.
- Good data in = good data out. Knowing you are looking at the correct data in your software enables you to make the right data-driven decisions in your business. If you’ve categorised a transaction incorrectly, or your bank balance is out, you are not looking at the correct information and could end up submitting incorrect data to HMRC. Careless mistakes can incur penalties in addition to interest.
- Knowledge and expertise – regulated accountants are required to maintain their knowledge through CPD (Continuing Professional Development) and are checked on regularly. This ensures up-to-date knowledge of tax laws and reporting requirements, and keeps you as the business owner on the right side of the law. Great accountants will also help you with reporting, challenges and help you achieve your goals.
- Saving time – it goes without saying that hiring a professional accountant will save you time. You can focus on running your business, doing the things you are great at, and leave the things you are less knowledgeable about to the accountant.
And finally, why would you not need to work with an accountant? We quite regularly suggest a sole trader does their own tax return – if they are running a simple business, we tend to send them some information on what they can/can’t claim, and suggest they save themselves the pennies whilst they grow, until they can afford to use us and offload some of their workload. On the other hand, if they simply want peace of mind from the very beginning, we will of course be willing to help!
If you’d like to discuss working with us, please book in a Discovery Call and we can work out how best to help you.