Do it yourself accounting? What could possibly go wrong?

‘Accounting isn’t complicated,’ ‘you just move the numbers around’ or ‘it isn’t worth it to me.’

Thankfully, the above phrases are not ones that we hear frequently anymore as we are surrounded by clients who value our services and understand what our role should be within their business. However, whilst we have been in practice, we have picked up numerous clients who are first timers to accountants and still do not completely understand. The majority of these have come across to us because they have realised that they are not comfortable doing their own accounts either limited company or sole trader returns as they are not sure what they are doing.

However, (isn’t there always a however) since the beginning of 2020 we have seen record numbers of people going self-employed and starting up their own company. A lot of new businesses and business people have not had an accountant or any financial professional since day 1.

To become a qualified accountant under the AAT (Association of Accounting Technicians) requires taking (and passing) 17 exams, these are not easy and take years to accomplish. Many of these exams also require working practical knowledge of being an accountant not just book knowledge.

As a fellow member (that is what FMAAT stands for), our accountant in chief Daniel Edwards has also had to show that he has been a full (qualified) member of the AAT for 5 years, been approved under the fit and proper person requirements for AAT, had a professional reference provided, satisfy the AAT that he has adequate working knowledge of being an accountant (5 years referencing) and pay the fee to hold the extra letters.

What this normally means is that we have seen most complex situations crop up over time and that we are competent and confident to fix them.

The most common mistakes that we see are:

  • Not logging depreciating assets correctly.
  • Salary and dividends not being taken tax efficiently.
  • Payroll being done incorrectly – this is complex work when it comes to holidays, overtime, pensions regulation.
  • Missing deadlines.
  • Not claiming allowable expenses.
  • Not being VAT registered when required.
  • Lack of understanding and application of amortisation.

Very few people would attempt to install electrics within their house or be responsible for installing seat belts in their car unless they were suitably qualified and trained to carry out the work. We see too many people who try to save money by doing their own accounts costing themselves more in higher tax bills than necessary or fines from HMRC. With the incoming changes to making tax digital for sole traders this situation is likely to get worse rather than better.

The majority of clients we take on are surprised at two things:

  1. How much time they have found as they are no longer pushing paperwork in family and social time!
  2. The relief of having a helpline to call, email or WhatsApp when questions or queries arise.

If you or someone you know has been on the DIY option and needs some quality expert help, please do book in for a free initial chat with Dan by emailing daniel@dkaccs.co.uk or call him on 01302613515.

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