IT Contractor - LTD Company - Do I need Accountant

[Graham_07]

Like OP, I do everything myself through ROS during the year, and my accountant checks all & then calculates & completes the year-end reports. However, he doesn't sign anything, and his TAIN number isn't on anything. And he told me only the directors sign the year-end reports, which is fair enough. So, imo there is no legal requirement for a signoff.

But what do others think, should I insist on a physical sign-off ? I suppose having an invoice from him will prove that he did them ?

OP - I'd pay an accountant for 1 more year to go through all the B1s, Form 11, CT1 etc. and then if you're confident go the diy route.

The directors and the directors alone are responsible for audit exempt financial statements. Paying an accountant in no way reduces that responsibility. Neither does it make the financial statements better or put the directors in a position where they might think "oh the accountant signed off so everything is hunky dorey, no fear if Revenue ever comes calling". Having an accountant will usually reduce the potential for error, and will ensure that the financial statements comply with Companies Acts etc., issues which the directors usually don't and couldn't be expected to have, an exhaustive knowledge of. (even though the Companies Acts themselves expect this ). The professionally drafted financial statements will also give a certain level of comfort to the client's bankers, especially if the company is looking for a loan or increased overdraft.

Where financial statements are required to be audited, the auditors report gives a certain level of assurance that the financial statements are free of "material misstatement" and whether they give a "true and fair view". This level of assurance is an onerous responsibility for the auditor and results in greater level of scrutiny of the records , and hence, cost.

Yes, professional accountants/auditors have professional indemnity insurance and if, in their engagement they have erred then they may be sued. There is also recourse to their professional body.

There continues to be many threads on AAM about doing ones own accounts, CT returns & CRO returns for limited companies. Fair play to you if you can do them all, more power to you. I know that I could, very probably, service my own car if I learned how to do it. I'd save some money and have a new skill. But I think my time is better spent at my profession. I also have the (perhaps misplaced or not) belief that the job on my car by my mechanic may be done better by that person who has been trained for it and spent, possibly, many years at that craft. Each to their own I guess.

 

[z103]

There continues to be many threads on AAM about doing ones own accounts, CT returns & CRO returns for limited companies. Fair play to you if you can do them all, more power to you. I know that I could, very probably, service my own car if I learned how to do it.

One huge advantage to at least doing your own bookkeeping, as the OP does, is that you know how well your business is doing from day to day. There are no nasty shocks at year end. You haven't spent all the VAT.

Many people fall into the trap of over relying on their accountant and just getting them to do the accounts once a year. I used to do that, and nearly went bust because of it.

 

[TonyFitz]

The following are my own personal experiences as the director of an SME; perhaps I chose the wrong accountant and I'm sure there are great accountants out there, so please don't this as a sleight on the whole profession.

The directors and the directors alone are responsible for audit exempt financial statements. Paying an accountant in no way reduces that responsibility.

Interesting. When I got that €3k accountants bill for uploading my balance sheet, I at least thought I was getting some peace of mind that he was taking on some of the risk if there was an error or if an audit was required.

We do all our own book-keeping (and it is an important distinction to make between book-keeping and accounting) - all businesses should at least be capable of doing that. If they have any cop-on they'll use accounts software to make it easier. At year end, the software produces year-end reports (balance sheet, P&L, nominal transaction list, bank rec etc) Basically all the key information required to submit annual returns. These figures are then compared against the previous years balance sheet to ensure everything looks okay, and are finally transposed onto the new balance sheet. All the other pages in the return follow a standard template.

I was left slightly disillusioned when the balance sheet I gave to my accountant was exactly the same one which appeared on CRO a few weeks later. What magic did he perform on it to warrant a €3k bill?

I hadn't phoned him for advise from one end of the year to the next. All I got from him was an ear-bashing for coming to him at his busiest time of the year with my accounts; well, what a coincidence! He did mention that he'd have to get one of the lads to come in over the weekend to do them because of the time pressure I'd put him under. To do *what* exactly? (Perhaps I should have questioned him more)

The professionally drafted financial statements will also give a certain level of comfort to the client's bankers,

I was paying €3k per annum for a Word template?

I also have the (perhaps misplaced or not) belief that the job on my car by my mechanic may be done better by that person who has been trained for it and spent, possibly, many years at that craft. Each to their own I guess.

A better analogy would be calling out a mechanic every time you need petrol in your car.

 

[Graham_07]

Interesting. When I got that €3k accountants bill for uploading my balance sheet, I at least thought I was getting some peace of mind that he was taking on some of the risk if there was an error or if an audit was required.

Your letter of engagement with him would indicate who was responsible for what. If you do not have one, you should.

(Perhaps I should have questioned him more)

I was paying €3k per annum for a Word template?

You should question and agree fees and what they are for. People will be overcharged sometimes in all walks of life.

Hopefully this thread will have stirred some to question their advisors a bit more. Get what they expect and for fair value to all concerned.

 

[Graham_07]

One huge advantage to at least doing your own bookkeeping, as the OP does, is that you know how well your business is doing from day to day. There are no nasty shocks at year end. You haven't spent all the VAT.

Agreed. Where possible we advise and assist clients to do just that.

 

[simplyjoe]

Leghorn : Many people fall into the trap of over relying on their accountant and just getting them to do the accounts once a year. I used to do that, and nearly went bust because of it.[/quote]


Very important post this. Many, many people hate paperwork and avoid it like the plague and then usually rely on their accountant to tidy up at the end of the year. At this stage it is not unusual for a person to have incurred huge debts that need immediate settlement. Sometimes the tax money has already been spent elsewhere. Whether the accountant does it or the tax payer does it books need to be kept up to date and taxes paid regular. This includes VAT, PAYE, and income tax. Also proper business decisions cannot be made without information in the form of a proper profit and loss account and balance sheet.
What we do is that we encourage most of our clients to invest in accounting software and training. Initially this is very expensive for the client but we try to control the process as much as possible. We get the client to produce a proper set of books and then reduce our fees in line with the reduced level of work then required of us. We then try to sell the client added value services such as tax planning, strategic planning. We network our clients together and help them with sales, marketing, etc.. We also find that we eventually get a huge amount of referals as clients see the benefit of what we have done for them. For accountants this is a risky policy as clients can be hugely resistant to the big changes involved as well as the costs. Our effort sometimes (not a lot) results in disenchanted and lost clients.