Do I need a bookkeeper?
Discussion
I am just trying to put together my accounts which are in a terrible mess (yeah I know I should be more organised) for a small LTD company.
When I present them to the accountant do I need to have a full set of books or can I get away with simple income and outgoing columns on a spreadsheet?
Compnay has made nothing and I am thinking of closing it down so I want to do this as cheap as possible.
TIA
Nik
When I present them to the accountant do I need to have a full set of books or can I get away with simple income and outgoing columns on a spreadsheet?
Compnay has made nothing and I am thinking of closing it down so I want to do this as cheap as possible.
TIA
Nik
A Ltd company will need a proper set of accounts prepared including a balance sheet.
You might have identifies what income and expenses were incurred but not what balance sheet items are affected-for eg whether through bank or cash.
It might be more cost effective to either do the work yourself or hire a bookkeeper to do it. Because a firm of Accountants will charge you a fee based on the time taken to prepare the accounts.
Typically at a higher charge out rate than a bookkeeper.
You might have identifies what income and expenses were incurred but not what balance sheet items are affected-for eg whether through bank or cash.
It might be more cost effective to either do the work yourself or hire a bookkeeper to do it. Because a firm of Accountants will charge you a fee based on the time taken to prepare the accounts.
Typically at a higher charge out rate than a bookkeeper.
I can tell you from experience that most accountancy firms will charge what they think the client will bear rather than what it actually takes to "do" the accounts.
The annualk accountancy fees of most small limited companies will cost much the same whether the records arrived in the form of a beautifully prepared, balanced and reconciled set of draft accounts or as a set of loose bits of papers, vouchers and receipts in a carrier bag. It's the "carrier" bag jobs that set the besic fee.
Presenting the accountant with "decent" records does not automatically get reflected in "lower" fees.
The value of book-keeping is not the effect it has on the final accounts but more the superior data it provides to the proprietor of the business on a day to day basis.
For really small companies, the proprietor may know all he needs to know already without having to worry too much about detailed recording of all the transactions.
The annualk accountancy fees of most small limited companies will cost much the same whether the records arrived in the form of a beautifully prepared, balanced and reconciled set of draft accounts or as a set of loose bits of papers, vouchers and receipts in a carrier bag. It's the "carrier" bag jobs that set the besic fee.
Presenting the accountant with "decent" records does not automatically get reflected in "lower" fees.
The value of book-keeping is not the effect it has on the final accounts but more the superior data it provides to the proprietor of the business on a day to day basis.
For really small companies, the proprietor may know all he needs to know already without having to worry too much about detailed recording of all the transactions.
I would most certainly agree with you that the difference in fees charged between a Ltd compnay with perfect records and one whose records are in a mess will not reflect the difference in the amount of work required.
At my firm at least however there would be a difference and we often charge a seperate fee on our invoices marked bookkeeping.
A freelance bookkeeper might well be cheaper than even a fraction of the increase in chargeable time. £10 an hour might still be cheaper than a fraction of £50 per hour.
At my firm at least however there would be a difference and we often charge a seperate fee on our invoices marked bookkeeping.
A freelance bookkeeper might well be cheaper than even a fraction of the increase in chargeable time. £10 an hour might still be cheaper than a fraction of £50 per hour.
Not really true, in my experience.
As I said earlier, most accountancy firms will quote a fee based on what they think the job will require, keeping an eye on the "going rate" and their charge out rates.
If the job turns out to be messier than originally envisaged, the fee is generally not raised too much.
In fact, if clients tidy their act up and present a much neater set of records to the accountant the following year, you would be surprised how few of them get a lower accountancy bill.
As I said earlier, most accountancy firms will quote a fee based on what they think the job will require, keeping an eye on the "going rate" and their charge out rates.
If the job turns out to be messier than originally envisaged, the fee is generally not raised too much.
In fact, if clients tidy their act up and present a much neater set of records to the accountant the following year, you would be surprised how few of them get a lower accountancy bill.
I have a brilliant relationship with my accountant/auditors but I've never yet heard of one offering to reduce their fees, even if the workload decreases.
Having said that, surely an accountant will quote for the work on a time basis and, if the books are in a very poor state or incomplete, then he/she will estimate the time needed to do the work and quote accordingly.
Having said that, surely an accountant will quote for the work on a time basis and, if the books are in a very poor state or incomplete, then he/she will estimate the time needed to do the work and quote accordingly.
Gassing Station | Business | Top of Page | What's New | My Stuff