Accountants in the Past
Accountants have undoubtedly been employed in some form or another since as far back as we can remember. In the Middle Ages, someone had to calculate how many eggs the chickens could lay and estimate how much grain to store for the winter, as well as counselling the King on the cost of war and how to replenish the state coffers.
The dawn of the Renaissance in the 12th century fuelled an explosion in trade, with merchants becoming busier and wealthier. New ways of maintaining detailed records of transactions were established, as well as the notion of creating financial statements to evaluate success and plan for the future.
The later agricultural and industrial revolutions further altered the financial structure of life and the role of the “counting man” evolved into something more significant. In post-war 20th Century, with the rise of commercial enterprise, the production of sound financial information became an essential ingredient in promoting market confidence, securing investment, and a necessity for good public relations. The importance of engaging the services of a proficient accountant became a priority in the world of business.
Today’s accountant can offer a variety of services to both the small business and the larger enterprise, using a wealth of experience, knowledge and expertise as well as a promise of confidentiality and a pledge to look after your best interests.
It is preferable to choose an accountant who is a member of one of the recognised bodies – e.g. Institute of Chartered Accountants in England and Wales (ICAEW) or Association of Chartered Certified Accountants (ACCA) – as he is governed by strict guidelines on professional behaviour. He is obliged to keep up to date with legal requirements and accounting practice, is covered by professional indemnity insurance, and has the benefit of being able to draw on the support and knowledge of other members when needed.
Aside from producing financial reports on the success (or otherwise) of your business activities, your accountant will also offer you support and advice with book-keeping, funding options, capital investment, employing staff and can undertake company secretarial duties on behalf of corporate entities.
Planning is important for your personal and financial future and your accountant can help you deal with the complexities of issues such as the timing of capital expenditure, minimising inheritance tax and capital gains. He will advise you on ways to streamline or expand your business, depending on how profitable it is.
Most significantly for the majority of people who engage an accountant, he can handle all of your tax affairs. The British tax system is complex, sometimes ambiguous and a little intimidating to the lay man. There are often special rules affecting different areas of trade, such as Farming and the Construction Industry, and there are accountants who specialise in these fields.
A good professional accountant will have an established relationship with HMRC and a working knowledge of the taxation system so that he can act as an effective intermediary between you and the tax man. He will know what reliefs to claim and when to claim them, what the tax inspector will accept and what he will question, and how best to utilize any allowances – all of which will help you to avoid paying unnecessary tax – both now and in the future.
What About The Cost?
Obviously, your accountant will charge you for the service he provides, but it is more than likely that you will recoup the cost of his fee in the amount of tax he saves you. On average Green and Co have saved their clients almost £2,000 in tax per £1,000 of fees charged, and the saving for farming clients is even higher at around £4,000!
Fees are usually time-based, but Green and Co now offer clients a Fixed Price Agreement before beginning work each year. The agreement offers a fixed fee which covers you for all work you expect us to undertake on your behalf, regardless of the time involved. This means you can call on us at any time without worrying about incurring extra charges. The fee is graded according to the level of service you require, and is payable in monthly instalments to ease your cash flow and make budgeting simpler. The agreement can also offer free insurance cover if exceptional extra work is needed in the event of a tax enquiry by HMRC.
Engaging the services of an accountant is undoubtedly a worthwhile investment and, as a bonus, it will also free up some of your time – often your most valuable asset. This allows you to focus on working at your trade or business, rather than worrying about deadlines , completing returns or pacifying your bank manager.
For more information about the services we can offer you and our fixed price agreements please visit our website, or call us on 01633 871122.
Please note: This article is a commentary on general principles and should not be interpreted as advice for your specific situation.