In the past you were more likely to get divorced than change your accountant due to the relationship you would build with them. Your accountant was someone you trusted and was often referred by a family member. Nowadays there are specialist accountants for particular industries to ensure you are getting a tailored service and specific advice to meet your needs.
Whether you are a new start up agency or an established recruitment business, getting the correct advice and figures from your accountant is vital to ensure your business is performing to its optimal capacity. Reviewing your accountant and the services they are providing is important to ensure that you are not missing out on advice on your company’s future and tax planning. Below are some examples of scenarios that some of our clients have experienced from their previous accountants that have shown them that their accountant was not right for their agency:-
1. Your Year End Accounts Are the First Profit Figures You See All Year
Receiving your monthly/quarterly figures is important for you as a business owner to understand how your agency is progressing and growing, or if your agency is failing or declining so you can do something to change the path. If the only time you receive these figures is at year end when you receive your year-end accounts then you cannot make those changes and it will impact on what is presented at Companies House. This is the main issue that agencies who come to TBOS have experienced in the past, and everyone realises the importance of it once they start receiving monthly management figures.
2. Your VAT Payment is Higher or Lower than Expected
Most business owners will be able to keep track of the VAT that they need to pay each quarter. If this is suddenly higher or lower than expected, this means that you could be over or under paying VAT if it has been calculated incorrectly. This can cause HMRC to launch an investigation, which can lead to fines, as well as time and money wasted on unnecessary audits. TBOS provides a fully reconciled account of all the VAT transactions within the quarter. We help your agency to understand how your figures have been calculated, and provide advice on the correct VAT structure.
3. Your Accountant is the Second Highest Cost on Your Profit and Loss After Staff
Your accountant is an important part of running your agency but shouldn’t be one of the largest costs to your business. If your accountant charges you for every telephone call, meeting or small bits of advice then it is advisable to look for a new accountant. One who can provide you with a service more in line with your needs at a reasonable cost. TBOS’s fees include the cost of accountancy services as part of its “per week per contractor” fee and this includes our fully comprehensive telephone and email support and regular meetings at no additional cost.
4. You Keep on Getting Fines and Surcharges from HMRC
If your accountant does not submit your PAYE or VAT returns on time or advise you to pay your statutory payments late then you will be subject to fines and surcharges that may stay with you for some time. Missing consecutive deadlines can lead to inflated fines and interest which will cut into your profits. TBOS manages the payments to HMRC to avoid fines and surcharges from HMRC by ensuring the payment deadlines are shown on the management accounts each month so there are no surprises at a later date.
5. You Are Expected to Sign Your Year End Accounts Without Understanding Them
Your accountant should not be sending you your year-end accounts to sign without first arranging a meeting to discuss them, or talking through the figures so you understand what you are signing. If they do then the figures may not reflect what you are hoping and have implications on the tax you are paying as a company and personally. As your year-end accounts are the only registered documents showing your company’s performance, it is important you know what they present about your company. This can affect credit limits and even future business with your clients. TBOS keeps regular dialogue with its agencies especially at year end and has meetings with agencies if required to discuss these face-to-face so they understand the figures presented.
6. You Have a Large Directors Loan at the End of the Year Without Being warned of the Tax Implication
If you use the company account for any personal expense, then these may be posted to the directors loan account, which can be paid off by allocating a dividend and must be cleared within 9 months of the year end. However if you continue to put personal expenses through the company and your directors loan grows to beyond the profits of the company (so a dividend cannot be allocated to pay this off) then you may be subject to Section 419 tax and incur a benefit in kind. TBOS have regular discussions with agencies that have a directors loan, so they understand the potential tax implications, how to reduce this going forward along with providing any warnings should they not be able to pay this off by the year end.
At Total Back Office Solutions Ltd we feel that all of these services are important in order for all of our agencies to grow and develop. TBOS provides a fully comprehensive back office and accounts service which includes all of the practical services above as part of our fee structure. Our service includes monthly management accounts and a helpline for any of our agencies to ask any questions they may have on company/tax planning and expense advice. We also have regular planning meetings with our agencies to help them to discuss their future plans and advise accordingly.