Accountants, bookkeepers and SMEs

I think the comments focus on smaller organisations within the SME range. 

As the business grows it will need more regular dedicated financial management support.  Often the accountants in practice cannot devote the time required, or justify the cost or lack the commercial experience required for a growing business.

Before the business owner rushes ahead and recruits a relatively inexperienced (low cost) finance director or financial controller they should consider that many FD's & FC's are working for a portfolio of SME clients each on a part time basis.  Therefore the client gets a wealth of experience on an affordable basis.

I can provide further information or contacts if any one requires this, contact me by email at NealSizmore@aol.com

Meanwhile lets work together to help the SMEs survive & thrive.

Small business owners have at least 5 options open to them when it comes to bookkeeping these days. They can:

• Try a bit of DIY - best only attempted after recieving guidance from an experienced accountant or bookkeeper;
• Do the same thing but using an online bookkeeping package such as kashflow;
• Do the same thing using a bookkeeping package on their computer - eg: sage;
• Use a postal service - sending off their monthly invoices and receipts etc to a service provdier who writes up their books  and then returns all the paperwork by post (eg: beprofessional);
• Engage a bookkeeper who knows what they are doing - such as a member of ICB; or
• Let their accountant write up their books when they produce the annual accounts and tax returns.

Some accountants may also effectively provide bookkeeping services - perhaps using a bookkeeper employed by the accountant or the accountant doing it themselves. We should remember that anyone can call thermselves an accountant (or indeed a bookkeeper). As such it's no surprise that the public is confused as to whether they need a bookkeeper as well as an accountant. And some accountants provdie bookkeeping services as part and parcel of their accountancy service.

I tend to agree with the views expressed in the article above. It's important for effective communication between whoever undertakes the bookkeeping and the business's accountant.

Historically it was quite common to ignore bookkeeping during the year and to simply produce annual accounts from the papers and records collated by the business owner.  This is no longer a sensible course of action. Such an approach may deny the business owner the facility to claim they took 'reasonable care' in the event that HMRC identify any careless errors. Where the taxpayer can show they took reasonable care to avoid errors HMRC are now unable to charge penalties as regards consequential underpayments of tax.  So effective bookkeeping throughout the year now has another benefit to commend it.

Mark Lee