5 of the wrong reasons you’re not using an accountant

Why are people so reluctant to use an accountant? I understand it’s an investment and it’s a cost that may be cutting into your profit margins, so it should be given serious thought. However, when I speak to people who are running their business without an accountant, more often than not, they’re giving the wrong reasons.

1.      “Using an accountant is too expensive.”

This depends entirely on who you are looking to use and there’s plenty to choose from. From sole trader bookkeepers and chartered accountants, to small independent firms like ourselves self, to regional and national firms or online-only accountants who can offer fixed-fee packages; you should be able to find an option that’s the right fit for you.

One question I do ask people is “If you drive an Audi R8, would you be taking it to Kwik Fit for its annual service?” The same consideration should be given to you running your business. How much do you value your business, and how much is it worth to ensure it’s operating in the best possible way?

2.      “I don’t need an accountant because I can file a tax return myself.”

In fairness, this is a legitimate response. For straight forward businesses it may well be the case that you’re fully capable of completing a tax return. However, an accountant should be doing more than just that for you. An accountant should not only be filing a tax return, but reducing your tax liability as much as possible as well as highlighting opportunities or risks to your business.

Not only that, but another question I ask is “How long does it take you to manage your accounts and can you be using that time in a better way for your business?”

3.      “I don’t use an accountant because I don’t know what they actually do.”

An accountant is a professional services provider, so, first and foremost, they should be providing you with a quality service. As for the service, that can vary greatly depending on what support it is you need. At a very basic level, an accountant is there to make sure your business is keeping up with its tax and financial responsibilities that are required by law. As the law is continually changing however, your accountant will be the trusted and knowledgeable advisor to keep you up-to-date on these, or even manage for you as efficiently as possible. Another way you could look at this is that you are paying for a service that gives you peace of mind, knowing that everything is in order.

4.       “I don’t use an accountant because I’m worried I won’t understand when it comes to talking about my accounts.”

Someone once admitted this to me and it had never crossed my mind beforehand. Part of the reason why some people avoid accountants is that it can be an arduous experience having a long meeting, finally getting to leave, but feeling unsure of why you’re paying them or what you’ve just been spending your time discussing. This shouldn’t be happening though. Find accountants that speak your language, not jargon. An accountant is there to help you make sense of your tax and accounting, not to obscure it.

5.      “I’ve just started my business and I’m too small to be using an accountant.”

Starting your own business is actually a crucial time to be seeking out an accountant to help you. If you’re looking for a loan to finance your business then an accountant can help prepare sound financial forecasts for the bank manager or other potential financier. Accountants also offer valuable advice when it comes to how you should structure your company and also how to pay yourself. They’ll be able to recommend the right accounting software for you to use. They’ll remind you of key deadlines which are different to usual for your first year of trading. Not only that, but, once you’re started and are seeking growth, an accountant can be the best partner for suggesting ways to maximise profit or minimise tax liability.