# IT Contractor - LTD Company - Do I need Accountant



## Mahons (8 Feb 2009)

Hi Folks,

I've been an IT contractor for 2 years now working as a LTD company and I'm wondering if I need an accountant anymore. I don't see the value in paying him over 1k to do very little in my eyes.

I use Payback software to work out my Salary/PRSI/PAYE calculations each month, I process my P30 each month via ROS and I've recently filed my own P35 using Payback figures. 

I also process my own VAT returns via ROS bi-monthly. Really, my accountant only gives me a P&L at the end of each year - which always works out the same as a report I can generate from QuickBooks where I keep my accounts details.

I guess my question is Do I have a legal requirement to get an Accountant to sign off on my books? I know I have to send my accounts to the CRO a B1 form I think which I haven't done before but really how hard can it be - I only have 12 invoices and minimal expenses!

Regards,

Mahons


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## papervalue (9 Feb 2009)

Mahons said:


> Hi Folks,
> 
> I've been an IT contractor for 2 years now working as a LTD company and I'm wondering if I need an accountant anymore. I don't see the value in paying him over 1k to do very little in my eyes.
> 
> ...


 
You do not need an accountant but if you are late for company office you will need accounts audited., could become costly. the company office will take no excuses for being late and if accounts are not in proper format and signed they will send them back to you. Also if looking for a bank loan bank will unlikely just accept you set of accounts with out accounting letter


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## capall (9 Feb 2009)

remember you are getting a tax deduction for the 1000 fee.

CRO is a bit of a nightmare if there is any filing problems ,you could always file months early so as to have time to rectify matters if there is a problem.
They have some online facilities but not great

Does your accountant not file your corporation tax returns,does he give you any tax advice,does he keep you up todate with changes in tax etc that effect you. 
If you ditch your accountant if you have a problem where will you go
For peace of mind generally I would say stick with the accountant ,thats if youre still working


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## simplyjoe (9 Feb 2009)

Stick with him. However if the accounts are that simple look for a reduction in the fee.


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## Graham_07 (9 Feb 2009)

I would say that it is hard to expect anyone to do statutory limited company accounts ( to standards expected by institutes practice review officer ) , CT returns CRO returns and whatever other incidental work might arise ( the Director's F11 for example) for less than €1,000+VAT. However one could negotiate on basis that provided the owner/director does x,y & z then the fee would not exceed a certain amount.


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## WaterSprite (9 Feb 2009)

papervalue said:


> You do not need an accountant but if you are late for company office you will need accounts audited., could become costly. the company office will take no excuses for being late and if accounts are not in proper format and signed they will send them back to you. Also if looking for a bank loan bank will unlikely just accept you set of accounts with out accounting letter



And if you are claiming audit exemption, you have to minute that at a board meeting and, as said above, the Annual Returns *must* be filed on time for the year in question and the previous year.  There may be other requirements (apart from the normal exemption limits) that I'm not aware of (or, more importantly, that you are not aware of).

I'd be very slow to discharge your accountant and would agree with the advice to try to renegotiate the fee somewhat and, if that's not possible, talk to other accountants to get an estimate to see if it's lower.  It may not be possible to get these services for less than €1,000.


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## mik_da_man (9 Feb 2009)

I'm in pretty much te same boat as you OP.
I'd say stick with him, I know that I've found it great peace of mind to be able to just pick up the phone and call my accountant with any query I have. I do most returns myself but if there's anything I'm unsure of I know the correct advice is only a phone call away.


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## Kerak (9 Feb 2009)

Have to agree, use professional assistance to get set up. I hate accounts and am perfectly happy to pay a management company and their fees to do it all for me. Including what I can and  cannot expense.

As usual on this site people saying you can do it yourself cheaper ( painting, accounts, h&S, fixing cars, hair cutting etc etc)  maybe you can but I very much doubt you can do any of these things as well, as quickly and as efficiently as an expert can.

Monday rant over

( CXCgolbal have downloadable advice sheets on expenses)
And I have no connection other than as a satisfied client.


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## camel (9 Feb 2009)

All that filing you do yourself, my accountant does for me. So maybe the service you're getting isn't great. Maybe shop around.


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## Graham_07 (10 Feb 2009)

camel said:


> All that filing you do yourself, my accountant does for me. So maybe the service you're getting isn't great. Maybe shop around.


 
Some people do their own VAT and PAYE/PRSI, others have it done for them, we have clients in both spheres. Just because the accountant does not do it for the OP does not mean the service he gives for what he does do is not good.


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## PeterSellers (10 Feb 2009)

My understanding is that the directors are responsilbe to do the final accounts for the company. 

A third party accountant is only required if you need your accounts audited.

So, if you are audit exempt and you know exactly what you are doing, they I don't think you need an accountant.

P.S. The accountants may tell you otherwise...


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## Mahons (10 Feb 2009)

Thanks for all the responses. 

I'm still in two minds but I think I'll try the negotiate route and see how I get on.


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## WaterSprite (10 Feb 2009)

PeterSellers said:


> So, if you are audit exempt *and you know exactly what you are doing*, they I don't think you need an accountant.
> 
> P.S. The accountants may tell you otherwise...



That's the rub.  OP seems to have a good handle on the ongoing obligations, like VAT returns etc.  But, does s/he know about how to validly claim the audit exemption and what corporate documents/processes are needed to do this?  I don't know the answer to this but, in my experience, things like corporate governance and proper account-keeping and filing have numerous formal requirements.  Each requirement in and of itself is not complicated but it's a matter of being sure of knowing what you are doing - not knowing what you don't know can be the problem.


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## TonyFitz (10 Feb 2009)

I was in a similar situation as yourself. I used to dump receipts, invoices and statements on my accountants desk, which meant him charging me all these hours for sorting out my mess.

Then a couple of years ago I started using accounts software. At year end I produced my own balance sheet, bank recs, P&L etc. and went to the accountant with all the reports. He compared with the previous years balance sheet (to make sure balances brought forward was correct) and told me he'd get back to me. 

I was shocked when the fee was *still* in the region of €3k - I'm not quite sure where all that time was spent, as the figures in the balance sheet he submitted was the same one that I'd handed him. And he wouldn't negotiate the price (my fault really for not checking the cost before handing him the work)

Anyway, I shopped around, and found a book-keeping company who I hand my reports to at the end of the year, and he signs them off and submits them for me. And the cost is *substantially* less.

ROS is a god-send. Being able to file VAT returns, P30, and P35 on-line means that by the end of the year the only additional cheque I have to write is corporation tax, and perhaps a small balancing amount on P35 or VAT.

If you need professional accountancy/taxation advise, then perhaps you'll be happier sticking with an accountant. But once my business was up and running and I understood how personal taxation and expenses operated, I ended up making one phonecall a year to the book-keepers to tell them I'm emailing over my returns for sign-off.


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## Graham_07 (10 Feb 2009)

PeterSellers said:


> My understanding is that the directors are responsilbe to do the final accounts for the company.
> 
> A third party accountant is only required if you need your accounts audited.
> 
> ...


 
You are correct. I would also emphasise the boldfaced part.

P.S. As an accountant/auditor . This is also a good analogy , I think.


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## simplyjoe (11 Feb 2009)

TonyFitz said:


> I was in a similar situation as yourself. I used to dump receipts, invoices and statements on my accountants desk, which meant him charging me all these hours for sorting out my mess. etc
> 
> Tony I can assure you that over a 3-5 year period if I (and I am sure the other regular accountant contributors) done your accounts I would more than save you the price of my fees. There are over 3,500 sections of the taxes acts. Each section has numerous sub-sections. The CRO/ODCE regulations are severe and non compliance is expensive. People either overclaim or under claim their allowances/expenses.
> Where people go wrong is that they allow their accountants to walk all over them. They dont question them. They dont fully utilise them. They allow them to overcharge. Shop around. Your accountant should:
> ...


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## z103 (11 Feb 2009)

> Be affordable but not too cheap.


Just wondering why your accountant shouldn't be cheap?


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## simplyjoe (11 Feb 2009)

IMO I would not feel confident dealing with people that undervalue their own worth.


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## z103 (11 Feb 2009)

> IMO I would not feel confident dealing with people that undervalue their own worth.


In my line of work, someone's 'worth' (or rather 'rate of pay') is determined by the market.

I have no problem paying less for something, especially if the quality is the same or (often is the case) actually better.


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## lukegriffen (11 Feb 2009)

Mahons said:


> ...my question is Do I have a legal requirement to get an Accountant to sign off on my books?



Like OP, I do everything myself through ROS during the year, and my accountant checks all & then calculates & completes the year-end reports.   However, he doesn't sign anything, and his TAIN number isn't on anything.  And he told me only the directors sign the year-end reports, which is fair enough.  So, imo there is no legal requirement for a signoff. 

But what do others think, should I insist on a physical sign-off ?   I suppose having an invoice from him will prove that he did them ?

OP - I'd pay an accountant for 1 more year to go through all the B1s, Form 11, CT1 etc. and then if you're confident go the diy route.


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## Graham_07 (11 Feb 2009)

lukegriffen said:


> Like OP, I do everything myself through ROS during the year, and my accountant checks all & then calculates & completes the year-end reports. However, he doesn't sign anything, and his TAIN number isn't on anything. And he told me only the directors sign the year-end reports, which is fair enough. So, imo there is no legal requirement for a signoff.
> 
> But what do others think, should I insist on a physical sign-off ? I suppose having an invoice from him will prove that he did them ?
> 
> OP - I'd pay an accountant for 1 more year to go through all the B1s, Form 11, CT1 etc. and then if you're confident go the diy route.


 
The directors and the directors alone are responsible for audit exempt financial statements. Paying an accountant in no way reduces that responsibility. Neither does it make the financial statements better or put the directors in a position where they might think "oh the accountant signed off so everything is hunky dorey, no fear if Revenue ever comes calling". Having an accountant will usually reduce the potential for error, and will ensure that the financial statements comply with Companies Acts etc., issues which the directors usually don't and couldn't be expected to have, an exhaustive knowledge of. (even though the Companies Acts themselves expect this ). The professionally drafted financial statements  will also give a certain level of comfort to the client's bankers, especially if the company is looking for a loan or increased overdraft. 

Where financial statements are required to be audited, the auditors report gives a certain level of assurance that the financial statements are free of "material misstatement" and whether they give a "true and fair view". This level of assurance is an onerous responsibility for the auditor and results in greater level of scrutiny of the records , and hence, cost. 

Yes, professional accountants/auditors have professional indemnity insurance and if, in their engagement they have erred then they may be sued. There is also recourse to their professional body. 

There continues to be many threads on AAM about doing ones own accounts, CT returns & CRO returns for limited companies. Fair play to you if you can do them all, more power to you. I know that I could, very probably, service my own car if I learned how to do it. I'd save some money and have a new skill. But I think my time is better spent at my profession. I also have the (perhaps misplaced or not) belief that the job on my car by my mechanic may be done better by that person who has been trained for it and spent, possibly, many years at that craft. Each to their own I guess.


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## z103 (11 Feb 2009)

> There continues to be many threads on AAM about doing ones own accounts, CT returns & CRO returns for limited companies. Fair play to you if you can do them all, more power to you. I know that I could, very probably, service my own car if I learned how to do it.


One huge advantage to at least doing your own bookkeeping, as the OP does, is that you know how well your business is doing from day to day. There are no nasty shocks at year end. You haven't spent all the VAT.

Many people fall into the trap of over relying on their accountant and just getting them to do the accounts once a year. I used to do that, and nearly went bust because of it.


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## TonyFitz (11 Feb 2009)

The following are my own personal experiences as the director of an SME; perhaps I chose the wrong accountant and I'm sure there are great accountants out there, so please don't this as a sleight on the whole profession.



Graham_07 said:


> The directors and the directors alone are responsible for audit exempt financial statements. Paying an accountant in no way reduces that responsibility.



Interesting. When I got that €3k accountants bill for uploading my balance sheet, I at least thought I was getting some peace of mind that he was taking on some of the risk if there was an error or if an audit was required.

We do all our own book-keeping (and it is an important distinction to make between book-keeping and accounting) - all businesses should at least be  capable of doing that. If they have any cop-on they'll use accounts software to make it easier. At year end, the software produces year-end reports (balance sheet, P&L, nominal transaction list, bank rec etc) Basically all the key information required to submit annual returns. These figures are then compared against the previous years balance sheet to ensure everything looks okay, and are finally transposed onto the new balance sheet. All the other pages in the return follow a standard template.

I was left slightly disillusioned when the balance sheet I gave to my accountant was exactly the same one which appeared on CRO a few weeks later. What magic did he perform on it to warrant a €3k bill?

I hadn't phoned him for advise from one end of the year to the next. All I got from him was an ear-bashing for coming to him at his busiest time of the year with my accounts; well, what a coincidence! He did mention that he'd have to get one of the lads to come in over the weekend to do them because of the time pressure I'd put him under. To do *what* exactly? (Perhaps I should have questioned him more)



Graham_07 said:


> The professionally drafted financial statements  will also give a certain level of comfort to the client's bankers,



I was paying €3k per annum for a Word template?



Graham_07 said:


> I also have the (perhaps misplaced or not) belief that the job on my car by my mechanic may be done better by that person who has been trained for it and spent, possibly, many years at that craft. Each to their own I guess.



A better analogy would be calling out a mechanic every time you need petrol in your car.


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## Graham_07 (12 Feb 2009)

TonyFitz said:


> Interesting. When I got that €3k accountants bill for uploading my balance sheet, I at least thought I was getting some peace of mind that he was taking on some of the risk if there was an error or if an audit was required.


 
Your letter of engagement with him would indicate who was responsible for what. If you do not have one, you should. 




TonyFitz said:


> (Perhaps I should have questioned him more)
> 
> I was paying €3k per annum for a Word template?


 
You should question and agree fees and what they are for. People will be overcharged sometimes in all walks of life.

Hopefully this thread will have stirred some to question their advisors a bit more. Get what they expect and for fair value to all concerned.


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## Graham_07 (12 Feb 2009)

leghorn said:


> One huge advantage to at least doing your own bookkeeping, as the OP does, is that you know how well your business is doing from day to day. There are no nasty shocks at year end. You haven't spent all the VAT.


 
Agreed. Where possible we advise and assist clients to do just that.


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## simplyjoe (19 Feb 2009)

Leghorn : Many people fall into the trap of over relying on their accountant and just getting them to do the accounts once a year. I used to do that, and nearly went bust because of it.[/quote]


Very important post this. Many, many people hate paperwork and avoid it like the plague and then usually rely on their accountant to tidy up at the end of the year. At this stage it is not unusual for a person to have incurred huge debts that need immediate settlement. Sometimes the tax money has already been spent elsewhere. Whether the accountant does it or the tax payer does it books need to be kept up to date and taxes paid regular. This includes VAT, PAYE, and income tax. Also proper business decisions cannot be made without information in the form of a proper profit and loss account and balance sheet. 
What we do is that we encourage most of our clients to invest in accounting software and training. Initially this is very expensive for the client but we try to control the process as much as possible. We get the client to produce a proper set of books and then reduce our fees in line with the reduced level of work then required of us. We then try to sell the client added value services such as tax planning, strategic planning. We network our clients together and help them with sales, marketing, etc.. We also find that we eventually get a huge amount of referals as clients see the benefit of what we have done for them. For accountants this is a risky policy as clients can be hugely resistant to the big changes involved as well as the costs. Our effort sometimes (not a lot) results in disenchanted and lost clients.


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