Categorized | alan's blog, VAT

Good accountants are FREE

Good accountants are FREE

Once again I’ve got embroiled in the argument about what is a good price to pay for an accountant’s services.

Let’s face it, there isn’t a lot of bookkeeping to be done with the typical nano-business and people begrudge laying out hard earned income to a third party when they can see no need to do so.

Fair enough, but they haven’t thought it through properly. Doing your own books probably takes around an hour a week, plus a chunk of time at year end to do all the statutory reporting and another hour every quarter to sort the VAT. Call it five hours a month.

However you are doing productive work that you aren’t getting paid for, so in effect it is costing you whatever your hourly rate is. Plus, to do it you are using time that is not meant to be work time, so arguably you are doubling the hidden cost, if you want to be really picky.

Now consider that accountancy fees average around £75 a month, which gives you payroll, VAT, Year End and probably the SA form all tidied away, properly and accurately. That’s roughly equivalent to two hours earned income a month at average rates. Except we already figured we would need five to do it yourself.
Add to that the advice even the most mean of accountants makes available to you on tax and related matters and the little bit extra they find at year end to reduce the tax bill a little further…

So even without the added value stuff, good accountants are free.

But before the accountants among us get all smug, so am I, even at my apparently monstrous day rate (well, monstrous in his market, anyway!). I’ve been at my current client for about two months. Apart from kicking off some fairly major reforms in their project management , which will make things a little more efficient, I’ve started a piece of work that will enable them to rein in their planned expenditure on new staff by highlighting which of the ones they have aren’t performing and which are under (or over) utilised. And for good measure I’ve been facilitating a piece of work on a new supplier contract that has taken many tens of thousands of pounds off the purchase price and a 5% reduction on the annual maintenance costs. Considerably more than I’m charging them to do it all,

So there you have it. Interim managers are free as well…

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Image: Syd Barret Visits His Accountant by danmeth

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