08008 620 950

The big mistake many accountants make that could cost you money

The truth is that most small business owners don't really understand what accountants do. They know they need an accountant to prepare accounts and tax returns and perhaps run payrolls and complete VAT returns - but apart from that they don't really understand what is involved.

So the main question that you may ask an accountant is how much his or her services will cost? Wrong question!

Because the accountant expects you to ask that question he or she assumes that you are going to choose on price. At this stage you have nothing else on which to base your decision. So the big mistake that accountants make is to quote too low a fee for their services.

If all you have is price to choose on, you may feel that the price quoted is right and engage the accountant. The accountant has by then assumed that you are price sensitive and will not be prepared to pay for a higher level of service. So he or she will only provide you with the level of service that the fee justifies. Amongst other things, this means that your records will not be adequately checked to ensure that:

  • Your bank accounts reconcile
  • The VAT and PAYE controls balance
  • All expenses have been included
  • The amounts that you owe your suppliers is correct
  • The amounts that your customers owe you is correct
  • And so on.

Errors in your records and accounts could mean that you pay more tax than you should.

More importantly, by assuming that you don't want any other services, the accountant could be costing you money by not offering the business development services that will help you to improve profits and grow your business.

So what you must do is look for an accountant who is prepared to spend time with you at the first meeting to talk about your business, your aspirations, your challenges and explain to you how he or she can help you to achieve your goals.

Then ask the right question. Ask the accountant to demonstrate the value of their services to you and your business. Then together prioritise those parts that are more important and arrive at a fee you can afford. Add other services as your business grows.