Key Post: How best to minimise accountancy charges for small businesses?

What efforts can be made to reduce the amount of work/time that an accountant has to put in an effort to reduce the charges applied?
If a bookeeper is employed, how best can this be achieved through their efforts?
Is there generic steps that any small (VA registered) company can take to reduce costs and time for an accountant?

Re: How best to minimise accountancy charges for small businesses?

If you get a good enought book keeper they should be able to 90% of what the accountant would do.
If the system is computerised. Make sure everything is reconciled at the end of the year. Bank, Creditors, Debtors. Keep statements. Keep and maintain a fixed asset register and calculate depr aswell.
When getting stuff ready for the accountant send everything in. Don't forget about things. Time is money and the accoutant repeatedly looking for things is a waste of time.
Best of luck.

Re: How best to minimise accountancy charges for small businesses?

I second the above - especially the point about bringing in all records intact and in an organised fashion.

A few others:

1. Keep a spreadsheet record of all transactions through your bank accounts, cheques, debits, lodgements etc
2. Route all non-business expenditures through a personal bank account rather than having them clogging up your business bank account.

Also, where possible:

1. Have your year end as 31 December -ties in with tax year and minimises apportionment issues.
2. Don't have any fixed assets in the company.
3. Don't employ staff.
4. Don't have any stock or unbilled wip in your business at year end.
5. Keep debtors and creditors to an absolute minimum by collecting and paying debts prior to year end.
6. Avoid having more than 1 business bank account at any given time.
7. Minimise the number of business loans or lease/HP deals active at any one time - otherwise tracking repayments can be time consuming.
8. Get your accounts prepared immediately after the year end when all issues are fresh in your own mind.
9. Operate only as a sole trader.
10. Don't bother claiming deductions for business expenditure paid out of your own pocket.
11. Avoid planning to minimise your tax liabilities.

Unfortunately, some of these strategies will, while reducing your accountancy fees, also increase your tax bills and/or business costs. Be careful not to overdo it!

Re: How best to minimise accountancy charges for small businesses?

Thanks for your reply ubiquitious. If possible, could you provide some helpful aternatives to the advise given, for example, when you state,
"Don't have any fixed assets in the company"... what are the alternatives here... leasing/HP?
"Don't employ staff"... is it better to contract out work as needed?

Re: How best to minimise accountancy charges for small businesses?

ivorystraws said:

"Don't have any fixed assets in the company"... what are the alternatives here... leasing/HP?

Click to expand...

No - see above

ubiquitous said:

7. Minimise the number of business loans or lease/HP deals active at any one time

Click to expand...

ivorystraws said:

"Don't employ staff"... is it better to contract out work as needed?

Click to expand...

In certain industries and sectors, this will help to reduce accountancy fees and general bureaucratic paperwork. In others it will increase both.

Do bear in mind that some of the above suggestions may be mutually exclusive and/or may not make sense from a business or tax planning perspective when applied to actual situations. Nos 10 & 11 in particular will rarely make sense in any actual situation, athough they will reduce your accountancy fees which was your original question.

Re: How best to minimise accountancy charges for small businesses?

Very good points by Ubiquitous.
Do get a simple to use accounts package which apart from the obvious ledger facilities of sales/purchases/nominal, retains all transactions in open database format for several years at least.
In addition, make sure that all reports ( ledger transactions, bank reconciliation lists etc) are date driven and can extend over any period length, but most important that the reports can be producted in html or pdf format, so that they can be attached to an email to your accountant and that they can then open and review these in their own offices, without any special software needed.

Moral of story - keeping the accountant OUT of your offices, saves you a lot of costs!