Having been an accountant for 20 years, I have heard all the stereotypes. Whilst they don’t offend me, I do feel that it’s important to dispel these myths so that people can understand what accountants actually do and why they’re needed.
1. Accountants are boring.
Anyone who has met me may have a multitude of things to say, but I would be surprised if they called me boring. Tax is boring which is why I rarely talk about it. If you bumped into me in a pub after work, I’d most likely be chatting about football, cars or horror films. Asides from myself though, you may feel that the likes of Eddie Izzard, Mick Jagger, Janet Jackson, Chuck Liddell and Phil Knight are far more interesting – all of whom were or studied to be accountants.
2. All accountants are good at maths.
Not necessarily true. People who I know to be better at maths than myself: mathematicians, engineers, architects and computer programmers. We do have one thing in common, we all at least understand fundamental mathematical principles. I will openly admit that I still use a calculator and an excel spreadsheet to make sure my calculations are correct.
What accountants are particularly good at is knowing about tax. Whilst many people choose to complete their own tax return, an accountant may be the most efficient person to accurately complete one, claiming back all allowable expenses to ensure you’re not overpaying on your tax!
3. Accountants bring no commercial acumen to a business.
58% of the FTSE 100 have a Chairman or CEO with an accounting/finance background. Would you be confident in changing supplier, buying a company car, or increasing your business loan, knowing that it was the best option for your business finances? An accountant would. Not only that, but if you chose to actively work with your accountant, they could identify opportunities for growth or provide tax planning strategies to help you maximise your profits.
Speaking personally, I run my own firm of Chartered Accountants. We’ve been going since 2010. In that time I’ve seen growth and loss and have navigated my business to survive those economically challenging times. I’ve expanded my team and diversified my business strategies. I am fully aware of how my business stands against competitors. I would describe myself as a businessman by nature and an accountant by trade (also note my LinkedIn title).
4. Small businesses don’t need or can’t afford an accountant
Just because you’re a one person business doesn’t mean you have to do everything yourself. You may be providing services for your clients, managing your own sales and marketing, picking up any products or supplies you may need to use, managing stock if you have any, invoicing customers and chasing up on late payments. On top of that do you really want to be doing your bookkeeping, accounts, VAT returns, and self-assessment tax return? Or to put it another way, wouldn’t you rather have more time to run your business by having to spend less time on the admin?
When it comes to affordability, it is of course important to find the right accountant for you and the size of your business. However, it is also important to bear in mind that it is cheaper to use an accountant in the long run than it is to only use an accountant when you receive that unexpected letter from HMRC and need to figure out what went wrong with your accounts.
A recent article from the ICAEW highlights that many SMEs are paying a higher effective rate of corporation tax than big businesses. This is largely attributed to their lack of expert advice on tax relief available to them, which is one more reason why it’s well worth investing in hiring an accountant.
5. I don’t need an accountant if I have accounting software
Using accountancy software is not the same as understanding tax. I might feel like I don’t need a gardener because I own a lawn mower, but that doesn’t mean I know how to make sure my plants are growing.
For instance, could you spot a mistake if something was not calculating correctly with your software? Would you be able to see if you were paying too much or too little tax? Or would you not realise until it was too late?
Don’t get me wrong, accounting software is great, and more people need to learn to use it, especially with Making Tax Digital coming into force soon. If anything, accurate and correct usage of accounting software will lower your accountant’s bill, but you will still need to work with them to make sure everything is being recorded correctly.