Your Year End Accounts Simplified
Year end accounts are the absolute winning service for traditional, old-style accounting firms to offer. This is because they’re a complete mystery to most businesses – and as such, firms can charge what they like. Something we see all the time is clients coming to us from other accounting firms having suffered huge bills and usually zero feedback on the job the accountants have had to do. In this blog, we’d like to demystify why these accountants are so expensive and frankly, fairly useless.
Picture Ebeneezer Scrooge and his workers in The Christmas Carol. This is a happy place for many other accountants. Lots of low-level accounting staff stuck at their desks, working hard and for long hours, producing something that nobody’s that impressed with. This is the scene in most traditional firms. This is because the partners in these firms like to take a bag of records from a client and magically create a set of printed, bound accounts that the clients don’t understand or really even need.
The mystery is the first issue with this over-engineering approach to year end accounts. Accountants don’t like their clients to know that in reality, 60% of their time was spent adding up bank statements (that the client could do), matching payments against invoices (that the client could do) and making sure they’ve added up the stocktake (clients are perfectly capable of this, too).
The second issue is that accountants don’t earn a lot of money for this. They’ll use a trainee to produce this work and the trainee will work day in, day out to get to the perfectly balanced figures at the end. So really, this is just income and not really profit for the accountant. An irony that accountants are focused on income and not profit… Welcome to the world of accounting firms.
What we do
At MNE Accounting, we do away with this extra year end accounts work. Not to say we don’t do it at all, we just invite our clients to do it instead – and instead of once a year, leafing through a thousand invoices and killing the best part of a week at it, we’ll preempt this and get a system in place that allows the client to do the work a few minutes at a time during the tax year.
We have to remember that the job of an accountant isn’t just to put these numbers together. Don’t get me wrong, there are several things we do that aren’t really feasible to train every client on. The main job for us is to get them into a format that HMRC and Companies House wants to see, with the backing information they like us to have. But most importantly, doing something with those figures is vital! Talking to clients about opportunities, in both business development and tax are vital tasks – they’re also things that add value to our service.
The byproduct of this focus on business results and not adding up paperwork is that clients always know where they are at all times. If they need a bank loan, they will be able to access their almost live figures all the time, not wait a couple of weeks for us to patch something together for them on educated guesses. If they want to pay a large bonus, they’re far more likely to know whether it’s okay to pay under our approach.
We always say to businesses that being under our advice isn’t some magical fix that no other accountant is able to offer, but the way we operate means clients have the best chance of accessing the right information at the right time – and they value the work we do for them. Attaching yourself to a traditional, old-style firm is a guaranteed way of your business also staying well behind the times. If you’d like more information about MNE Accounting or how we can with your year end accounts, feel free to contact us and we will be happy to help.