Should you do your own accounts?

Do you need to hire an accountant?

Accountants and lawyers are experts in their field and receive years of training. That’s why most people turn to them when they need something done in their area of expertise. But is this always necessary? We ask just how much value an accountant adds to a trade business.

Around 90% of trade businesses have ten or less employees and at this level it’s pretty much impossible to justify a full-time accountant. If your business is less than 10 employees (or maybe even less than 20), this article is designed to help.

The question is how to get your accounts done in the most effective way.

Before getting into any detail, there is the question of personal preference. If you like being in total control of your business, doing your own accounts may come naturally. In contrast, you may think that it’s always best to leave it to an expert. It’s more complicated if you don’t identify with one of these black and white positions.

Keeping complete control

“Taking control” has been a popular phrase in recent years. There is an upside to being in complete control of your business. When it comes to your accounts this can be seen as:

• You are the master of your business and no one will have as much of a handle on it as you. Cash flow is critical to survival. When you do the accounts, you will be as on top of this as it’s possible to be
• You don’t depend on anyone. You can make sure that things happen on time and are always done right
• You can save money. Accountants don’t come cheap. You rarely meet a poor one
• No one cares about your business more than you do. Your accountant won’t care as much. If you’re unlucky, they will prove incompetent. But it’s still you that will get the hassle and fines from HMRC for mistakes

Problems doing your own accounts

Having looked at the reasons for doing it yourself, it’s worth looking at the upsides of getting things done by a professional:

• Doing the accounts doesn’t come naturally to most trades people and it can be hard. Everyone hates paperwork and doing the accounts yourself means even more. If you liked paperwork, you wouldn’t be working in the trade
• When it comes to accounts, unfortunately we are all amateurs. You know what amateurs are like when you have to fix their bodges. It usually takes longer than if you had done the job in the first place. When it comes to the accounts the boot is on the other foot
• Accountants should have lots of expertise when it comes to minimising tax and it’s hard to keep up with all of the changes to the rules. They should do a better job than you and this should cover their fees
• People also rely on their accountants for general business advice. Since they work across many businesses, they can have insights that are really helpful
• When you consider the amount of time you may have to spend on your accounts, you may be better off on the tools. Then you can afford to pay someone else to worry about the accounts

At the end of the day

There is a balance between control, cost and effort when it comes to deciding how to do your accounts. A lot comes down to personal preference.

That’s why, at the end of the day, you have to make your own decision. While most trade businesses owners choose not to, a decent minority decide to do the accounts themselves. There are pros and cons. Good luck in making that decision.