Historically, accountants have charged large fees for preparing the accounts and completing the tax returns for businesses.
In these changing times are these high fees a thing of the past?
All businesses, regardless of size, must prepare accounts and submit a tax return to HMRC. The traditional view is that preparing these returns is a complex procedure resulting in sky-high accountancy fees.
However, two key factors have evolved over recent years that challenge this and as a result the fees charged by accountants should reduce dramatically.
Advances in technology
In all areas of life, there have been huge advances in technology over the past decade. At last the accounting profession is catching up.
Computer-based bookkeeping packages have become easily accessible to business owners at an ever-reducing cost and ever-increasing ease of use.
This means the quality and completeness of information made available to accountants at year-ends is constantly improving.
Coupled with this, accountants now use accounts production software that greatly simplifies the preparation of annual accounts and tax returns.
Logic would dictate that the evolution of technology would have led to a reduction in accountancy fees.
Increase in the number of small businesses
There are nearly five million businesses in the UK. Small, non-complex businesses account for 99.9 per cent of this number. In fact, the growth of small businesses is at its highest level since statistics were recorded.
The accounts and tax affairs of these businesses are simple. They do not demand many hours of tax advice. Most of the time is spent in what is generally known as compliance duties. For example, preparing the accounts, filing the tax return and making sure all deadlines are met.
The accountant’s fee should reflect the level and complexity of the work required.
The accounting profession is gradually waking up to the changes in technology and businesses over the past decade.
This is very good news for small businesses out there that should be able to benefit for dramatic reductions in their accounting fees. A great help in these tough times.
Elaine Clark, www.cheapaccounting.co.uk