With what seems to be an out of control economy and the biggest cost of living crisis that many of us would have seen in our lifetimes, now is simply not a time to be complacent about your business outlays.
A thorough review of all costs should be right at the top of your current “TO DO” list including the need to review the spend on accountancy.
With this in mind here are three top tips for saving on your business accountancy costs during this cost of living crisis.
Keep it neat and embrace technology
Staying up to date with your record keeping is a perfect way to save on accountancy fees, especially those associated with the bookkeeping aspect of the task.
Long gone are the days when you’d pop all of your receipts, invoices, bank statements and credit card bills into your accountant’s office at the end of the financial year.
The use of technology such as Cloud Accounting (robust software for recording transactions and reporting to HMRC and Companies House) or Challenger Banking Apps (newer to the market technology providing a bank account with inbuilt accounting software) make the capture and recording of the financial transactions for your business very simple.
Key to this is having a dedicated business bank account so that the software sucks everything through by way of a bank feed which requires just a few minutes of set up.
The analysis of the transactions is made easy by machine learning meaning that the system will remember where you posted things previously and analyse them to the same place awaiting approval.
If you use an accountant to do the bookkeeping, you should see an immediate reduction in your accounting costs as embracing technology certainly helps to reduce the time spent on the capture and analysis of the transactions, of course that you do it right and regularly.
Top tip – Cloud Accounting system favourites are FreeAgent, QuickBooks and Xero. Challenger Banking Apps are provided by Mettle (part of NatWest), Tide, Starling and many others.
Review your software
If you’ve already embraced technology, or are about to, make sure that you choose the best software for your business at the best price.
The cost for using Cloud Accounting systems or Challenger Banking Apps is often charged per month and, of course, if you stop paying you’ll lose access to your accounting data.
Often a vendor will offer a free trial or low cost trial period for the software with the fees increasing afterwards.
As this is going to be a long term outlay for your business it is worth getting the right solution from the outset or even to make a change to reduce future outlays if the cost of your software has increased.
Top tip – If you have a NatWest business bank account or a Mettle account (NatWest’s free Challenger Banking offering) then you get the FreeAgent Cloud Accounting System for free. FreeAgent is owned by NatWest so they are unlikely to withdraw their free offer! All IT Contracting visitors can also get a 10% FreeAgent discount here.
Get accountant ready
The thing with accounting is that either you do the work or your accountant does but someone has to. Obviously the more that you do yourself, as long as you are doing the “right” things, then the less your accountancy fees will be.
The best approach to getting things right and reducing your fees is to invest in the relationship that you have with your accountant.
Set aside time to talk with them about what they need from you both during the year and at the year end.
Reach an agreement on what software you’ll use and how they will access your system.
Top tip – to maintain ownership of your accounting make sure that you own the subscription to any software. This means that you can control who you invite into your accounting system.
Should you want to switch accountants in the future then you can simply remove the authorisation for your existing accountant and invite your new accountant to access your system.
This approach prevents the “golden handcuffs” that some accountants hold over clients where they own the software subscription and are providing the system as part of their accountancy package.
Ask your accountant to tell you if something is wrong in your record keeping and how to rectify this going forward. There is simply no point in your accountant moaning that you don’t do things right if they do not tell you what “right” is!
Remember that your accountant is a supplier – you are paying them for a service. So take control of the relationship and ask them to explain what corrections they have needed to make and what you should do to avoid these in the future. If they are not happy to do this then find an accountant who is!
About the Author
Chartered Accountant Elaine Clark is the Founder and Managing Director of CheapAccounting.co.uk which she launched in 2007. An early adopter of using accountancy technology for routine tasks means that Elaine and her team of qualified accountants have the ethos of cheap accounting fees; a clear difference to just being cheap accountants.