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Management vs statutory accounts - who should do what?

Do Accountants and Accounts software designers still think that SMEs should not be able to draw up accounts in statutory format? Recent questions/answers (see below) suggest to me that at least some do think this.

Gone are the days when SMEs could only realistically do the book-keeping and needed others to turn it into financials. Modern software puts the dividing line at a much higher level.

In my SME we want to have all this information available - we understand it and think that it is part of runnning the business. However, I guess that, because this is "AccountingWeb", answers will argue to preserve portions of the work for only those Qualified to do it.

Our SME does employ an Accountant - & he's great. But I think he would agree that working electonically at the year end would be far simplified if I can produce (and look at before I send to his team) the draft summaries in various formats, including statutory format.
[E.g. one of the niggles is that Line 50's P&L doesn't separate out Interest Earned from Sales.]

My own profession (statistician) had to come to terms with this sort of thing a few decades ago with a plethora of stats packages and percieved loss of business for the professionals. All its really done is to remove a lot of dross and make the professional job more interesting.

BTW: I learnt from an answer to 'Charity Accounts Foftware' that "Sage have two accounts products,
Sage Accounts Production (SAP) and Sage Accounts Production Advanced (SAPA)." So I requested brochures from Sage. The guy who sent them (very promptly) asked me how many number of companies I need to produce accounts for. I emailed back that I'm an SME not an Accounting Practice. He replied: "We have a separate division which deals specifically with Industry, I look after accountants only." (so he's forwarded my email).

I'm interested to know if this just Sage's approach - or do all UK accounting software suppliers have quite distinct products/support/teams for the Profefssion and the ROW?
Jane Bryan-Jones

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19th Feb 2005 00:47

statutory accounts packages
Try speaking to IRIS (transaction Technology) or PTP, they are friendly.

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By Anonymous
21st Feb 2005 14:13

I've always believed that .....
a trained monkey could do my job. Its just that its cheaper to pay me than to train the monkey.

Similarly, I suspect the number of permutations required to be programmed in to a package would cost it out of the market.

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20th Feb 2005 10:07

Sage Report
You said

"[E.g. one of the niggles is that Line 50's P&L doesn't separate out Interest Earned from Sales.]"

Change it.... Nominal/COA/Default chart/Edit

It's easy

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By Anonymous
18th Feb 2005 17:08

Statutory Accounts Production
Hello Jane

We at Datel actually specialise in supplying Sage statutory accounts production software to accountants who work in industry. The reason this is treated separately from practice is that you tend to have different requirements, in terms of support, sales and training than those in accountancy practices. We have a wide range of size of company who use the software from FTSE 100 to SME. The price depends on the number of sets of accounts including single company. Clients use the software for various reasons, to gain control over their accounts production process, to keep up to date with legislation as well as reducing accountancy fees. If you require any further information or would like a demonstration copy of the software please contact me on 01925 849075.

regards

Mark

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18th Feb 2005 22:25

Specialist requirement - unnecessary
Final accounts production is a specialist vertical market for accountants only.

In the LabTests on accounts packages I don't look for anything much beyond a basic P & L and Balance Sheet.

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20th Feb 2005 20:13

Let the accountants do it...
First off, I am not an accountant (as anyone who reads my occasional posts will attest!)

Next: I consider myself relatively intelligent; can follow complex information; can learn new law and tax related issues; can do a lot of mundane stuff myself and am confident in my abilities.

I still wouldn't actually want to do my accounts myself - because if you've ever tried reading in-depth accounting rules and regulations; law and process changes (which seem to happen weekly, and often at odds with what (to me) it appears the "rules" say, then you wouldn't have time to run a business!

Minor errors in your accounts can cost you thousands in fines, investigation costs (if you are unlucky) and who knows what in health effects of stress. If you're running a half decent accounts package, and employing a qualified accountants / auditors to look after the rest - AND GETTING UP TO THE MINUTE ADVICE as part of the deal, the minor incovenience of, say, actually having to pay for it :-) is well worth it, surely.

So, to sum up: you need to look at the bigger picture, in my humble opinion, and not just look at this as an additional cost, but an additional safety check and advice giving session can help, not hinder.

Justin.


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20th Feb 2005 21:00

I can't believe my eyes -
- a businessman who actually appreciates accountants!! Justin, would you be interested in a sponsorship deal? You could go round the country doing business seminars, saying what you just said, and handing my card out discreetly at the end!

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18th Feb 2005 13:53

I really can't agree with this question
I don't want to appear to be arguing for a closed shop and I have read and noted the point that the questioner does have an accountant, but the thought that springs to mind here is "the man who is his own accountant has a fool for a client."

Surely, the reason final accounts software isn't marketed directly to SMEs is because there is no demand, not because there is some form of cosy relationship between the profession and the software industry?

And the reason there is no demand is because most SMEs realise it isn't worth investing valuable time re-creating the wheel and being diverted from income-generating opportunities. They presumably also realise that it's simply not sufficient to rely on software (not matter how good or expensive) because the old GIGO syndrome will rear its ugly head - you actually need expertise to be able to do this stuff correctly.

So if any SME feels they have sufficient expertise in company law, GAAP, accounting standards, the FRSSE, general tax law and practice, corporation tax, Revenue form-filling etc etc (I'm sure there's lots more), then good luck to them but, personally, I'll think that the only person who could possibly do that would be an accountant recently departed from practice.

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By neileg
18th Feb 2005 14:05

Mmm...
I used to use Sage Line 50 and linked it to an Excel spreadsheet to do my statutory accounts. Worked fine for me.

As for separating interest and sales, you dont have to accept the default report formats, you can brew your own.

I agree that it is crazy to pay accountant's rates for bookkeeper's or word processor's duties.

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18th Feb 2005 08:48

what's the problem
I am sure that you are able to buy software that will produce statutory accounts. All the organisations that sell it are commercial companies, after all. I am sure that even Sage will offer to sell you either of their offerings.

The benefit to accountants of such applications is that they deal well with accounts for lots of different organisations. Neil has quite rightly pointed out that there is an annual cost, but there is also the cost of appropriate training, both in the use of the software, and in keeping up to date with disclosure requirements. It is, after all, dangerous to rely only on a software package to produce all the required disclosures - however good it is.

A business with a requirement to produce accounts for multiple entities, and a consolidation, may well see benefits from using somthing like Caseware, and in practice you would find that some do this in house, and some are happy to contract it out (and often to their auditors).

For the typical SME a better route may be to set up a template for the basics in a spreadsheet, and make use of lookup formula and an exported TB to automate the process, and leave the statutory disclosure bit to a professional. You will find many large plc's that require their subsidiaries to start from this point. For many organisations the important part of this process should be in being able to predict the results, and engage in tax planning (which I believe is still allowed?).

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By jacp400
17th Feb 2005 17:56

Software Companies
Hi Jane

Yes, software for practice is different to software for industry. Sage have divisions that look after both, although most software suppliers specialise in their own sector:

ie for business; Pegasus, Access Accounts, Open Accounts etc.

for practice; Iris, Digita etc.

Hope this helps.

John Clough
Numerica LLP
Tel: 023 8070 2345
[email protected]

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By NeilW
17th Feb 2005 19:28

Vested interests
You have to remember that one of the main reasons that Sage and its ilk are everywhere is not because the software is the best in the world, it is because it is the best marketed. Just like Microsoft Windows.

The people who push Sage and have made it the 'de facto' standard are accountants and people in the profession. Therefore it would be bad business for Sage to produce software that takes accountants' business away from them.

It is perfectly possible to produce software that would do all the statutory paperwork for most businesses instantly off the back of a well kept set of books driven by somebody who knows what they are doing.

The question is would you or anybody else pay the lease cost of such software which would be considerably more than the £200 or so SMEs seem to think software should cost.

NeilW

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17th Feb 2005 21:21

is it cost effective?

The software that produces final accounts is, by it's nature, one that will require constant updating to take into account changing standards. It will therefore always be an ongoing cost to the business every year.

Is it really worth an SME producing statutory accounts when I suspect the cost of doing so from your auditor is relatively a small part of their overall audit cost?.

Many auditors will nowadays use all inclusive packages that take the audit evidence and produce the final accounts, you may find they will not even reduce your audit fee if you do it yourself.

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By Anonymous
18th Feb 2005 09:25

Software
Many of these software houses are pricing themselves out of the SME market especially Sage. As soon as I mention Sage prices to my clients they all say no.

There are many other less well known companies and some are much better products depending on your requirements.

VT software has everything you need for book-keeping and to produce statutory accounts and all at a very reasonable price.
www.vtsoftware.co.uk

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By NeilW
17th Feb 2005 22:43

Reduction in audit requirement
A great many SMEs no longer require audit. £5.6 million turnover and £2.8 million assets is a pretty big company.

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