Can I prepare my company's accounts?

Can I prepare my company's accounts?

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We're a £1.5m turnover service business selling time. Our accounts are in good order using Xero accounting package. We've expanded our finance team from 1 to 2 people and now find ourselves with capacity to deliver more in-house. 

I'm a qualified accountant, and have experience preparing accounts from my days in practice. Our external accountants have prepared our accounts for the last few years, but I'm wandering what are the pros and cons of doing it ourselves.

As I understand, the pros are:

- More control

- Lower costs

The cons are:

- More effort

- Might get it wrong

- Don't get an 'Accountant's Report'

On that last point we very occasionally have to submit our accounts for tender purposes. I'm not sure how much they'd mind not having such a report (I presume I can't write one myself!). Any thoughts? 

Does anyone have any experience on making this decision that they'd be able to share. I'm also interested in the interaction with submitting the CT600 tax return with iXBRL the two sort of go hand in hand now.

Thanks,

Replies (9)

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RLI
By lionofludesch
28th Aug 2013 14:06

Yes

In theory, you can do it.  In practice, I'd worry about that tender issue.  If you were asked for a report, you'd never get the job done in time to meet a tender date.  Make sure you keep up to date with the disclosure requirements.  I know one company that submits its own accounts and they are shockingly deficient.  Yet there have been no repercussions over the past 12 years so one can only assume that Companies House staff can't be bothered/don't have time to read accounts any more.

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By bernard michael
28th Aug 2013 14:34

If you needed any bank borrowing for expansion the bank won't accept them. The money saved compared with the cost of your time is probably not a lot either way. Stay with the status quo

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By jdm5454
28th Aug 2013 15:07

If you prepare an end of year pack for the external accountants the cost should be no more than  £1,000 and probably less. So its perhaps worth their report that says you gave them the figures. If its more go out to tender

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Teignmouth
By Paul Scholes
28th Aug 2013 15:41

I agree

Whilst it is getting easier & easier for companies to prepare their own accounts and submit them to the authorities, unless you fancy keeping up to date with accounting standards and tax legislation, and, as others have said, with the "tender" issue being a potential problem, I'd go with jdm5454's response and do as much as you can to make your accountants' work as straight forward as possible.

So, unless you have already done so, find out from your accountants how they get Xero's TB into their accounts prep system and do the work for them.  In our case for example we take our client's XERO TB as a CSV file and code it to our own system's (Iris) nominal codes.

After a couple of years, and once we are happy the client's TB is creating sufficient info, we hand the coding job to the client and they prepare the CSV file for us each year.

Similarly, if the accounts need new text each year, in some of the notes to the accounts, prepare the facts & figures for the accountants in advance.  Unless the tax stuff is out the ordinary, the accounts prep system they use should pretty much prepare most of the CT submissions, including iXBRL formats, automatically.

If you did decide to go the DIY route then, from one client's experiences, who went out and bought year end software to DIY (with us overseeing), where they fell down was on the tax & iXBRL side. You can do your own CT return online and, if you prepared accounts in Word or Excel I'd suggest using an online facility, such as Iris Openixbrl to prepare an iXBRL version of the accounts

 

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Replying to I'msorryIhaven'taclue:
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By Cath Walker
31st Aug 2013 21:22

Importing to Iris
You don't even need to get them to code a csv - you can create an import map and have Iris do it automatically.

A lot of my clients use QuickBooks, which doesn't use ac nos by default so I have a standard spreadsheet to create an import map the first time I do it, which I code to Iris and then next year, it's automatic.

I may just write a blog one day of how to do it, if people are interested, because Iris don't seem to tell anyone! I worked it out for myself.

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Michael
By Balcorman
30th Aug 2013 11:49

Lower Costs

Lower costs may not result from this. Not only is there the cost of your own time, but if you want to keep this down by using a commercial accounts prep package - which will be up to date with all accounting standards etc - there will be a substantial annual cost with this. For example, we use Digita integrated software which does 95% of the work automatically, once the final TB is input to it. Of course it needs to be reviewed and there are always a few things that need adjusting, but by and large it is a matter of mouse clicks to get there. We can produce statutory accounts, abbreviated accounts for Companies House, and the CT return and file the lot online. When this is spread out over a shedload of clients, the individual cost is very reasonable - but in your case it will all fall on your company. It could be cheaper by far to stay as you are, plus you have that additional benefit of the accountants report which, as mentioned, is something lenders will always look for as part of their "comfort" requirements.

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7om
By Tom 7000
30th Aug 2013 14:38

Do the accounts yourself...

Then give them to an accountant and pay him £150 to check them - ie that the disclosure is right etc  and pay him £200 to prepare the tax comp and  send in the CT 600.

Copy last years format

Thats the cheapest way to do it.

 

If you cant be bothered preparing them ie typing them into excel/ word then you have to bite the bullet and shell out the other £650 for him to do it.

Well thats what we would charge :) www.ttca.co.uk

 

 

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By thawkins
30th Aug 2013 15:19

I do accounts myself...

I am a qualified accountant who has not worked in practice but prepared accounts for audit when working in large corporations.  I currently run my own non-accounting business and also prepare my husband's corporation tax accounts. 

Once I am happy with his final accounts, I use the HMRC's own combined corporation tax and company's house software available free from their website.

This not only completes the corporation tax return but also necessary accompanying accounts and submits everything.  Additionally, it also prepares and submits Companies House accounts.

I have found this to be simple to use and it allows for all necessary adjustments. 

My husband's accounts are relatively straight forward, and with sites such as this help keep up-to-date, I haven't come across any problems.

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By mydoghasfleas
30th Aug 2013 16:26

Are you really saving anything?

How long will it take you to prepare the accounts and put them into a stautory format?  What is your time worth to the business?  Is your time well spent doing this or can you deliver greater value doing something else?  What will any additional software cost you? 

The answer to the question as the answers indicate, is yes but perhaps you have asked the wrong question.

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