The good news is that a clearly defined relationship with your accountant will help you both! What does your accountant do for you? And what are you expecting?
- Accounts
- Tax returns
- VAT
- Bookkeeping
- Payroll
- Business plans
- Company secretarial
- Pseudo FD
That's a whole load of different things, and it's not always done by the same person. Think about it like the relationship with your doctor . . .
You wouldn't ask your GP to prescribe your glasses, or to crown a tooth. And accountants vary as well. The chances are that the more things you need, the more people you'll end up dealing with. And overall, you'll be paying more for their services.
So it pays to get your stuff organised, do what you can yourself, keep your costs down, and then bring in a specialist only when it's necessary. One of the big differences is that when accountants talk about “doing the accounts” they mean year end accounts or statutory accounts. When some people talk about “doing the accounts” they mean “bookkeeping”, and that's quite a different subject!
Bookkeeping is like a jigsaw puzzle
Start with the bookkeeping. It has to be done properly. If the books don't make sense, then the accounts won't make sense! And bookkeeping normally means using proper software to do it properly. If you're doing it yourself then you need to buy a mainstream bookkeeping package and get training on it.
Bookkeeping is like a jigsaw puzzle. The last thing the accountant wants to do is unpick badly done bookkeeping and to have to do it all again, properly. It takes twice as long and it costs twice as much! At least with a jigsaw puzzle you get an image to work from. With bookkeeping there is no sneak-preview of the end result. Badly done books means a complete rework!
It's a false economy to do the books yourself, unless you know exactly what you're doing. Most small businesses need one of the following:
- A proper bookkeeping package and proper training on it; or
- A classically trained bookkeeper with a classic set of ledgers; or
- A trained bookkeeper who comes in once a week or once a month to work on your system; or
- A bookkeeping bureau which takes in your records and gives you regular reports; or
- A fully functional crystal ball.
Trail Balance
In order to do the accounts and the tax return, the accountant needs a trial balance from the bookkeeper, together with full sets of business bank statements and probably a nominal ledger activity report. If you can do it yourself, that's fine.
If you need help producing a trial balance, then you need a bookkeeper and not an accountant. Make sure your bookkeeper knows exactly what you're expecting from them. And make sure that your accountant knows exactly what you are expecting them to do!
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