Watching your new business grow is an exhilarating experience. There’s no better feeling than seeing the fruits of your labour blossom into reality.
While a lot of the initial groundwork only needs doing once (thank goodness), the paperwork is sadly here to stay.
Repetitive tasks – such as housework and cooking – are the most likely to be outsourced. If we only have to do something once (or very infrequently), we’ll usually tackle it ourselves.
Process-heavy tasks that require regular attention, however, are a lot more draining. And when it comes to process-heavy tasks, bookkeeping, tax returns and VAT are high on the list.
The number of small businesses taking on accounting services is growing every year. Many SMEs would rather spend a little more to buy them peace of mind – and avoid falling foul of HMRC.
However, for some people – especially sole traders or those just starting out – accountancy services are an unnecessary splurge. Instead, they turn to DIY bookkeeping software, devoting countless hours to managing their finances themselves.
While it’s true that some businesses – such as hobby ventures – might be too sporadic to justify hiring an accountant, this isn’t the case for the majority.
In this blog, we’ll examine – and dispel – five of the most common accounting myths around.
Prepare to be enlightened…
MYTH #1: ACCOUNTANCY SERVICES ARE EXPENSIVE
When it comes to hiring an accountant, one of the biggest deterrents for small businesses is the imagined price tag.
Financial services are generally considered expensive. While this may have once been true, the amount of practicing accountancy firms has boomed in recent years. Increased competition has resulted in more competitive pricing.
It’s also led firms to broaden their range of services – meaning you get more for your money.
Note: With Addition’s CORE plan, clients get a dedicated financial team, monthly bookkeeping, quarterly VAT returns and a host of other services for just £99 a month.
MYTH #2: ACCOUNTANTS ARE RESPONSIBLE FOR MANAGING YOUR MONEY
Accountants are often confused with financial managers. The roles are similar, but not the same.
Accountants analyse the numbers in your business (such as cash flow, expenses and profit). However, they don’t make the decisions. They don’t control where and when your money moves – although they can certainly offer advice on the subject.
Ultimately, that call is for you as a business owner to make – and execute.
A classic example of this misconception in action is Payroll. Some people assume that as an accountancy firm manages the payroll, they are also responsible for paying staff.
It’s important to note that accountants don’t generally have access to a business bank account. Ensuring your employees get paid correctly and on time is your job – not your accountants.
The good news is that some accountancy firms now include Payroll as a service extra – meaning you can hand over this tedious task if the urge arises.
Note: Most firms charge payroll add-ons per employee. Addition’s Payroll service lets you add up to 5 employees for a £25 monthly flat rate.
MYTH #3: ONLY BIG COMPANIES NEED ACCOUNTANTS
If you’ve ever had to do your own bookkeeping, taxes or Self Assessments, you know how much easier life would be with an accountant.
While there is support and information available via HMRC, accessing this can be difficult. Understanding it can be even tougher (especially if you’re unclear on the jargon).
Even the most minor misunderstanding or error can trigger a chain reaction that results in a (sometimes hefty) fine. You’re also likely missing out on potential returns and reliefs you could be claiming.
Hiring an accountant not only saves you time (and sanity) – it will save you money, too.
Note: Addition plans grow alongside you. We have a whole range of add-ons to choose from, so that you can start small and level up when ready – without a hefty price jump.
MYTH #4: ACCOUNTING IS ALL ABOUT MATHS
It’s true that accountants are all about numbers. However, this doesn’t just boil down to basic arithmetic skills.
A more accurate description of accounting is recording and analysing transactions, as well as advising clients of various tax laws and liabilities.
Obviously, a strong grasp of maths is essential for this role. However, modern software and automation have greatly reduced the need for manual calculations.
It’s more about problem solving and analytical thinking.
Accountants are trained to spot potential problems, as well as potential opportunities. They don’t just balance the books – they help you boost your bottom line!
Note: Our CFO package is an example of this. Users get Key Performance Indicator reviews, two monthly hours of expert consultation, business health reports and more.
MYTH #5: ACCOUNTANTS WILL SOLVE YOUR MONEY PROBLEMS
We’re not saying this isn’t true – only that it’s conditional.
Accountants can provide advice and clarity on money issues. They can put your tax affairs in order. They can provide information, support, and look at ways to help you cut costs. However, accountants are not miracle-workers.
At the end of the day, you’re the boss, and whether your business succeeds or fails depends on how much time and effort you’re willing to put into it!
Note: While we can’t magic up money, we can help you get everything that you’re entitled to. With our R&D package, users can determine their eligibility for a host of schemes, relief claims and more.
WANT SOME HELP WITH THAT?
Looking to scale up? At Addition, we consider our biggest success to be a client outgrowing us.
Why not book a call and let us make it all add up?