Imagine my despair.
https://www.accountingweb.co.uk/anyanswers/question/salary-v-divs-spreadsheet
Should accountants be toolmakers? or tool users? or just tools?
Replies (18)
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Why not?
If you are not organised enough to set up your own template, why not pay someone a few quid (probably less than you would pay a junior) to do it for you?
I pay people to do my scanning, and don't see anything wrong with that.
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I think the point is if you know your stuff you probably don't need a spreadsheet to do it roughly, and if you don't know - building the thing is probably a good plan to learn how the rules work rather than it being a big mystery.
It would take what, 15 minutes to build one from scratch?
you are joking?
It would take what, 15 minutes to build one from scratch?
I don't know what sort of software you could be talking about. To build something that caters for every combination of profits, salary and / or dividend that any customer may want to enter, and calculate all the taxes accurately, your estimate is hugely inaccurate!
Rest assured that all our customers understand the rules, can explain the calculations to their clients, and could do the calculations themselves if they wanted to.
They choose to use software because, if they want to look at several possibilites, it is far more efficient to click a button and have the work done for them.
Finansol Tax Calculators
Ah George I
see what you mean now. 'Tis a fine line you draw between using "tools" to make the job easier and doing everything from scratch.
Quite right
"Is that if those that are selling accountancy services to the great british populus, are using bought in software"
I read the OP and was left spluttering through my beard over my tea and DT. The youth of today just don't realise that there is nothing wrong with a quill pen and a proper leather bound ledger and a few T accounts. Worked for my grandad and works for me. None of this fancy VT or Sage stuff for me. ;-)
Time-saving software
I must admit, I resisted using any small-business accounting and taxation programmes when they first came out, but over the years have moved over to buying these things more and more, even the little calculator-type things referred to here sometimes. When I am at my best, I build my spreadsheets properly, with input controls, error checks and cell protection etc, but I am not often at my best, so I recognise the benefits of getting something designed properly. It is more about the design than the accountancy.
The only danger is that by not doing the calculations yourself over and over again you get a bit rusty and get too reliant on the software.
by george
to follow that thro would mean that you would do wages by hand , please NO
nothing wrong in the route of least resistance
Me thinks you are talking through your abacus
I am one of the users of that very neat and reasonably priced software. I know the rules and should I have the inclination I could "do the maths" every time the question came up.
I could also design spreadsheets to format an extended TB into CA compliant accounts but why on earth would I waste my time?
As this thread started because our customers recommended our software, I would just like to add some further comments:
Ours is not spreadsheet based. We use VB programming, with a 'neat' (thank you pushtheriver) customer interface. All the user sees is their entries, and their results.
Our approach also helps to make sure the customer can't accidently enter something that would give a ludicrous result, for example negative profits after salary, NI on that salary, corporation tax and dividend.
I am pleased to say there never has and never will be a 'rogue answer' in our calculations. Our calculations are always accurate, as they are so very thoroughly tested. But if hypothetically there was an error, then I have every confidence that our customers would notice it. They understand and think about the answers.
Been to a garage lately?
Why not right some "expert" diagnostic and surgical procedures tuition software so that we can all go and be doctors?
The first thing the grease monkeys do these days is hook your car's onboard computer up to their diagnostic machine and ask what's wrong.
Then they suck through their front teeth and tell you you need new brake pads too.
disagree
There's no need (in my mind) for a tool to tell you, in any given situation, if people did take the trouble to "run the numbers" each year, they'd find that those people just apply "rules of thumb" have condensed all the calculation to a set of turning points that hold good in all situations.
Your so-called rules of thumb cannot be applied everywhere. There can be all sorts of reasons why shareholders want or need a particular salary or dividend that is not prescribed by your rules of thumb. They need a combination that is as close as possible to what they desire, while also being tax-efficient. The accountant will advise, in full knowledge of their client's situation. The software removes the time and tedium when trying many combinations until they get a solution that is best both for the client's situation and as tax efficient as possible.
I'm sure that none of our customers would go to a client, advising a particular action 'because the software says so'. They would go armed with an understanding of why each calculation shows the figures it does. They'd be able to explain exactly which figures went into the income tax, NI and corporation tax calculations, the effects of small alterations pushing the income into different bands, effect on whether any personal allowance is due, tapering of personal allowance, exactly which amounts must be deducted before dividend can be paid, effects on company profits and whether company has small profits or into marginal relief, and lots more...Then they will fit the ideas from the software around everything else they know of their client, including lifestyle, preferences and the rest of their accounting and tax affairs.
At the same time, the client will be pleased with a nicely printed report of the combinations the accountant has suggested, including the exact amounts of all the applicable taxes, to which they can later refer.
Been to a (add title here) lately ?
Further to the "been to a garage lately" comment, have you been to a Solicitor lately, or been to a Doctor lately ?
This type of approach is being used more and more across all trades/professions (I don't want to get into a "trade/profession" debate as there is one on this site already !).
It is similar to the calculator argument when I was at school, in that it was perceived by many to be inferior to doing manual calculations.
Technology has moved on massively since then and will continue to do so into the future.
Accountants (and others) can choose to use/embrace this, or to continue as they were.
eg. a Flat Rate VAT calculation could be done in (say) 5 minutes rather than (say) one hour - the Accountant could then spend the 55 minutes saved doing something else.
Ps - Before the usual "if it takes you an hour to do such a calculation then you should hang your head in shame and not call yourself an Accountant" type response, thetimes quoted are to illustrate the point and are therefore for "illustration purposes only". The point being that these programs save time which the Accountant could then use to add more value, generate more income or just relax !