For small companies, it is not a legal requirement to hire an accountant. However it is a legal requirement to provide detailed and accurate records of your business, and the business owner or a director is responsible for doing so. Therefore very often business owners delegate the tasks and responsibility to the professional accountants.
For big entities that require an audit, it is a necessity to hire an accountant.
Can I do my own accounts?
Providing that you do know what you are doing, it is fine for you to do your own account.
You will need to know all the rules, deadlines, standards and keep up to date with the law changes.
Benefits of hiring an accountant:
- Could save you taxes
- Could advise you on changing strategies and cut the costs
- Could save you from getting into legal trouble
- Could help you make profitable financial decisions
- Saves you time and stress dealing with the authorities for you
Who is a bookkeeper?
A bookkeeper is a person that keeps your books in order. The role is a part of accountancy. Bookkeeper will record your daily transactions: sales, purchases, receipts, payments, balance the bank, watch over the cash-flow. The bookkeeper will feed the financial information to the accountant.
The cost of hiring a bookkeeper is about £10-£20/hour.
Who is an accountant?
A person that prepares the accounts reports (based on the information’s provided by the bookkeeper) for analysis, advises on financial decisions, prepares the financial statement for planning and decision making, and advises on tax law and investment opportunities.
There are 2 types of accountancy:
- Financial, that will gather the data for financial statement and calculate the tax.
- Management, that will provide in detail reports for managers and business owners to help them make decisions on investments, mergers, expansion etc.
In the UK, there are few professional accountancy bodies that maintain the standard of practice and evaluation of their members.
How to choose an accountant?
It is up to the business owner to make sure that the accountant has the relevant qualifications and valid registration. The valid certification should be displayed.
Accountants who hold valid certification by one of the professional accountancy bodies had to go through a rigorous process to get there:
- Pass all of the exams,
- Have a few years’ working experience in accountancy role signed off by a senior qualified accountant,
- Comply with all the rules to renew their license on a yearly basis eg. Attend seminars to keep up to date with the law updates, training sessions and keep their CDP records up to date.
- Have professional indemnity insurance.
How much does it cost?
The cost varies. It depends on the amount of work and transactions, the level of responsibility, complexity, and quality of information provided.
There are different services provided by Directus Ratio Accountancy Ltd:
Self-assessment for individuals; costs start from £120 per year and can range to £250.
Sole trader for self-employed; costs starts from £120 per year
Limited company costs start from £70/ month and include; statutory accounts, tax return, abbreviated accounts submission to HMRC, and Companies House, corporation tax return, subscription to the online accountancy software, VAT submission, HMRC inspection support, real time performance dashboard and all reports view at the click of a button.
This excludes bookkeeping and is based on complete and well-kept books.
Bookkeeping costs, as above between £10-20/hour
PAYE payroll from £10/run
VAT returns (calculations) from £15/month
Management accounts start from £50/hour
Last minute (within 1 month of the due date) additional charges may apply.
AAT Accountancy Membership
Directus Ratio Accountancy Ltd. Is one of 125,000 global members. AAT is the UK’s leading qualification and professional body for vocational accountants.