DIY Accounting - Doing Your Accounts Yourself
To be completely honest, unless you require an audit, there is absolutely no obligation for your business or company to appoint an accountant.
Many business owners are trying to cut costs these days, and they often look to cutting their accountancy fees; either by finding a cheaper accountant to do the same work, or simply doing the accounts themselves.
Now, if you do want to do your accounts yourself, it's not impossible; you just have to be prepared to spend a bit of time researching how to do it. Here's some things to keep an eye out for:
- Make sure every transaction is in the right place
- Ensure you use the required format (this is particularly important for incorporated companies)
- You will need to learn how to deal with tricky, unusual, and sometimes, ambiguous transactions
- You need to know exactly what is tax deductible, and what is not
- You need to get the tax computations correct and in the right format
- Any information or forms you will need to complete your accounts are all available on the internet. If you are a sole trader, you should look mainly at the HMRC website, and if you are an incorporated company, you should look mainly at the Companies House website.
- Since iXBRL was introduced by HMRC, you must submit your accounts & tax online.
Don't worry though, the software to do all this is available for free from the HMRC website. All you need to do is set up a login and then wait for the PIN to arrive through the post (this could take some time, so plan ahead).
There are some questions you should consider before doing your accounts yourself though, mainly:
- Is your time worth more than your accountancy fees?
- Can you commit to doing the accounts?
- Can you be 100% sure that your workings out will be correct? (There are many penalties & fines, and ignorance is not a valid excuse)
- Would you have paid less tax if a tax expert had done your accounts for you?
- Could you instead be focussing your time on a money making activity that would more than cover the costs of your accountant's fees?
- Could you deal with a tax investigation on your own?
So there you have it; if you want to cut costs and do your accounts yourself, make sure that you ask yourself these questions first, because if you can be making more money instead of doing your accounts, it could be a bad business decision.
Many business owners are trying to cut costs these days, and they often look to cutting their accountancy fees; either by finding a cheaper accountant to do the same work, or simply doing the accounts themselves.
Now, if you do want to do your accounts yourself, it's not impossible; you just have to be prepared to spend a bit of time researching how to do it. Here's some things to keep an eye out for:
- Make sure every transaction is in the right place
- Ensure you use the required format (this is particularly important for incorporated companies)
- You will need to learn how to deal with tricky, unusual, and sometimes, ambiguous transactions
- You need to know exactly what is tax deductible, and what is not
- You need to get the tax computations correct and in the right format
- Any information or forms you will need to complete your accounts are all available on the internet. If you are a sole trader, you should look mainly at the HMRC website, and if you are an incorporated company, you should look mainly at the Companies House website.
- Since iXBRL was introduced by HMRC, you must submit your accounts & tax online.
Don't worry though, the software to do all this is available for free from the HMRC website. All you need to do is set up a login and then wait for the PIN to arrive through the post (this could take some time, so plan ahead).
There are some questions you should consider before doing your accounts yourself though, mainly:
- Is your time worth more than your accountancy fees?
- Can you commit to doing the accounts?
- Can you be 100% sure that your workings out will be correct? (There are many penalties & fines, and ignorance is not a valid excuse)
- Would you have paid less tax if a tax expert had done your accounts for you?
- Could you instead be focussing your time on a money making activity that would more than cover the costs of your accountant's fees?
- Could you deal with a tax investigation on your own?
So there you have it; if you want to cut costs and do your accounts yourself, make sure that you ask yourself these questions first, because if you can be making more money instead of doing your accounts, it could be a bad business decision.
