When you think of accountants, you might immediately imagine a boring, middle-aged man in an ill-fitting suit and coffee-breath. Admittedly, we’ve met a few of those over the years, but that’s not the reality with the whole industry.
For some reason, this stereotype seems to abound, as does the idea that accountants charge a lot of money for old rope. I mean, how hard can it be to put some numbers in to a spreadsheet? Especially these days when you have cloud-based accounting software that can do it all for you, right?
With this logic, it begs the question why anyone, specifically small business owners, would waste their money hiring a so-called expert, when it’s free to do it yourself.
Now, far be it for us to tell you how to spend your money but bear with us for a moment. One of the big benefits of having an accountant on board is that they are trained to see the bigger picture. We tend to come down on the side of cautious optimism because we don’t just look at the next week or month.
It’s this kind of approach that you might well went to adopt when weighing up whether or not you should hire an accountant now. For arguments sake, let’s say an accountant is going to charge you £500 to do your Self Assessment. That means raking through that bag of receipts you’ve dumped on their desk, logging everything, analysing your income and expenditure, determining what’s deductible, reducing your tax liability where possible, filing the return with HMRC and keeping you updated.
On the surface, £500 might seem like a lot of money for “shuffling receipts around”, but it’s actually very time consuming. That sort of work takes a fair few hours to complete. However, you’re not just paying for their actual time. You’re paying for their years of training (which hopefully is always ongoing given the changes that are constantly coming in to effect), as well as their experience. Or at least you should be with a good accountant.
Equally, think about the alternative.
You could save yourself £500 by doing it yourself, but as you’re not an expert, how long is that going to take you? Perhaps it would take an accountant five hours, but as a novice who doesn’t really know what they’re doing, maybe it takes you ten.
How much could you earn in that time if you were working, or out on a job? Suppose you could have earnt £100 per hour, the same as your accountant in the example, then you’ve lost out on the opportunity to earn £1,000 in the time it’s taken you to do your Self Assessment yourself.
Not only that, but once you finish, are you sure you’ve done it correctly? Are you absolutely certain you haven’t missed something off? Do you know you’ve reduced your tax bill as much as possible, or are you left overpaying because you’re not aware of something that’s actually deductible? In a few months’ time are you going to be faced with an investigation, or a fine, because you’ve made an error?
Hiring an accountant, no matter what stage you are at with your business, could actually save you money. Whether that’s in the form of deductions, or simply by saving your time so that you can earn additional revenue.
What is it they say? If you think hiring a professional is expensive, wait until you hire an amateur.