“I’ve invested in a piece of accounting software. It’s great and saves me so much time and money, meaning I don’t need an accountant now, right?’’
Wrong. Lots of contractors assume they don’t need accountants if they’re using accounting software, but that’s not really the case.
In this article, we’ll take a look at what accounting software is, why it certainly doesn’t remove the need for a contractor accountant and how, in actual fact, this technology can work in perfect harmony with an accountant.
What is accounting software?
In a nutshell, it’s any software that gives you visibility of your business finances. It can help you track income, expenditure, send invoices, keep a record of receipts and expenses, and often also give you an overview of your tax liabilities. Popular accounting software out on the market today include Quickbooks, Xero, Wave and QAccounting’s very own expenses app.
The core aim of many of these apps is to give you, as business owners, a clearer idea and better control of your incomings and outgoings, allowing you to see how well your business is doing in real-time.
So why do I still need an accountant?
While accounting apps can improve efficiency when it comes to keeping your finances on track, it doesn’t negate the need for a contractor accountant, and here’s why.
Your software won’t manage your accounts or do your bookkeeping. While it can simplify your costs and automate invoices, for example, an accounting app won’t take care of your tax responsibilities.
Every self-employed person would love to have an app or something that automatically organises and files their end of year company accounts for them. While AI (artificial intelligence) may offer hope of that technology existing in future, for now, you still need an accountant for this.
It’s the same with preparing your self-assessment tax return, quarterly VAT payments or Corporation Tax bill. Using an accounting app only offers you guidance – it can give you a tax estimate and streamline your personal and business accounts, which in turn can make things easier. However, a specialist contractor accountant will know how to prepare and organise your accounts, ensure all of the information is correct, and even submit your tax returns to HMRC on your behalf.
As helpful as software can be, it won’t give you the personal touch that an accountant can. Contractor accountants will be able to offer you expert advice tailored towards your business – from guidance around how to minimise overheads, improve your profit margins and even grow your enterprise.
Another advantage of having a trusted accountant is security. They are often an expert when it comes to tax regulations (at QAccounting it’s the IR35 legislation amongst others) and therefore will not only ensure you are compliant, but will be able to make you aware of, advise and prepare you for any tax changes that could affect your business.
Is it worth investing in accounting software then?
Of course. Accounting software can be incredibly valuable and could play a crucial role in saving you time and hassle when it comes to managing your finances. In fact, it should work in partnership with your accountant, so you and they can do a better job at helping make sure your business is tax efficient and tax compliant.
With over 20 years’ experience in supporting contractors, QAccounting is one of the UK’s leading contractor accountants, offering a range of full service accountancy packages that start from just £95pm + VAT. For more information, please request a callback – one of our friendly contractor accountants will be in touch.
Autumn Statement – Headline Changes
Autumn Statement – Headline Changes
Extracted from the ACCA Guide to the Autumn Statement 2022
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