Re: Burnt out with the business

[z103]

I have moved this from another thread as it was distracting from the main thrust of the thread - Brendan

I too would agree with most of the above. Apart from this;

3. Outsource your accounts & VAT work to your accountant and/or a bookkeeper.

This will just vastly increase your overheads, and you wont be able to afford the cleaner!

There's lots of software out there that will be far cheaper and will also save you time (not having to deal with third parties). You'll also be in more control of your accounts, and will know exactly where you stand financially. This is really the last thing you should consider outsourcing.

 

[ubiquitous]

...vastly increase your overheads,....

Vastly?? I presume you're exaggerating a tad here?

...and you wont be able to afford the cleaner!

How do you know? Are you the OP?

.There's lots of software out there that will be far cheaper and will also save you time (not having to deal with third parties).

Really? Not so sure about saving time to be honest. Which is the most time consuming - posting vat invoices and net wage details to a bookkeeper once a month or two, or doing this work yourself?

For what its worth, a 2-monthly VAT return for a straightforward service business can cost as little as €60-80 every 2 months (possibly cheaper). A quarterly P30 return for one employee should not cost much more than €100.

You'll also be in more control of your accounts, and will know exactly where you stand financially. This is really the last thing you should consider outsourcing.

If you believe this, you should ask yourself why so many businesses outsource their accounts. And why every accountant and bookkeeper in the country is booming.

 

[z103]

Vastly?? I presume you're exaggerating a tad here?

No exaggeration. It sounds like the OP is running a small company so accountant fees would certainly make a huge impact in the overheads.

How do you know? Are you the OP?

No. I'm guessing.

Really? Not so sure about saving time to be honest. Which is the most time consuming - posting vat invoices and net wage details to a bookkeeper once a month or two, or doing this work yourself?

Certainly doing the work yourself. Without a doubt. It takes about five minutes to do the wages for example. You also have a much better understanding as to how well you business is doing. It makes it much easier to do cash flow analysis etc.

For what its worth, a 2-monthly VAT return for a straightforward service business can cost as little as €60-80 every 2 months (possibly cheaper). A quarterly P30 return for one employee should not cost much more than €100.

lol! - QED! (I think these are outrageous costs)
and then how much are the annual returns etc...

If you believe this, you should ask yourself why so many businesses outsource their accounts. And why every accountant and bookkeeper in the country is booming.

Well if accountants and bookkeepers are charging €100 for a P30 for one employee, I can see why business is booming!

 

[Vanilla]

There's a level at which you are either busy, in which case you should be able to afford a bookkeeper, or you are not busy, in which case you cannot justify a bookkeeper and should do the work yourself. I don't think the charges outlined are outrageous by any standard and I think it is good advice for the OP.

 

[z103]

I don't think the charges outlined are outrageous by any standard

Maybe you're in a particularly high paying profession. Every penny counts for many small business owners.

There are really two things to consider with this. When a business owner does their own books, they have complete control over their finances and can see how well they are doing. If they are doing badly, they can arrest the situation, and (hopefully) not get a nasty shock at the end of the year.

The second thing is the cost issue. How can you say that €100 isn't outrageous for doing one return? You can nearly buy the software for that price. On a personal level, I suppose I can take comfort in the fact that I'm saving €€€s every time I log onto www.ros.ie

Anyway, (So we don't stray too far off topic), I thought the rest of the advice was good. Especially this;

7. Increase your prices by, say 20%. Even if you lose 20% of your customers, you will still be earning the same money and working 20% less.

Something I never really thought of.

 

[ubiquitous]

The second thing is the cost issue. How can you say that €100 isn't outrageous for doing one return? You can nearly buy the software for that price.

Payroll software costs at least €120 per year. You still have to know how to use the stuff after that. In that context, an annual cost of €400 for 12 months returns isn't bad in my book. In fact its insignificant in terms of the annual cost of employing someone.

Btw, ROS doesn't do payroll calculations.

 

[z103]

I'm replying from personal experience. We used to get our accountant to do everything and of course every year we would get these huge bills from our accountant. From week to week we didn't have a clue how well our business was doing. We didn't know if we could afford an advertising campaign, or if we could afford to hire someone, or if our money was going to run out in three months time.

To put it simply, we were in the dark.

By all means outsource the cleaning etc, but the accounts are far too important to outsource.

 

[ubiquitous]

Huge bills? €400 per year for payroll? €60-80 for a VAT return?

There is a big difference between outsourcing routine accounts work and not knowing what your ongoing financial and cashflow position is from day to day. While (in my opinion) its a good idea to use an accountant or bookkeeper for the former, its a bit much to expect your accountant to hold your hand to the extent that you give them responsibility for the latter.

 

[z103]

Payroll software costs at least €120 per year. You still have to know how to use the stuff after that.

Most packages these days are pretty easy to learn. For us, the wages are simple.

In that context, an annual cost of €400 for 12 months returns isn't bad in my book. In fact its insignificant in terms of the annual cost of employing someone.
Btw, ROS doesn't do payroll calculations.

How much does a P35, P60s and the odd P45 cost? The cost of employing someone is irrelevent here, we are only talking about compliance costs.

BTW, I never said that ROS does payroll calculations. I just use it to upload my returns. I think it's fantastic.

There is a big difference between outsourcing routine accounts work and not knowing what your ongoing financial and cashflow position is from day to day. While (in my opinion) its a good idea to use an accountant or bookkeeper for the former, its a bit much to expect your accountant to hold your hand to the extent that you give them responsibility for the latter.

Funny you should mention that. Last year I was talking to a person that has a company in Sweden and this is how they operate. They use their own system to input all the routine accounts, and then their accountant offers advice about cash flow, forcasting and other such stuff. The accountant's role seems to be quite different.

The unfortunate reality is that many business owners will hand over all their accounts to a bookkeeper/accountant, and won't do any financial analysis.

 

[ubiquitous]

How much does a P35, P60s and the odd P45 cost? The cost of employing someone is irrelevent here, we are only talking about compliance costs.

Like all costs, you can get good deals depending on where you look. Costs vary as does quality of service (not always in proportion).

I mentioned that payroll and vat compliance costs are insignificant in terms of wages and total overheads because you said that "accountant fees would certainly make a huge impact in the overheads".

Funny you should mention that. Last year I was talking to a person that has a company in Sweden and this is how they operate. They use their own system to input all the routine accounts, and then their accountant offers advice about cash flow, forcasting and other such stuff. The accountant's role seems to be quite different.

What makes you think that accountants here don't offer similar services?

The unfortunate reality is that many business owners will hand over all their accounts to a bookkeeper/accountant, and won't do any financial analysis.

I would argue that a business owner who spends several hours every month on basic compliance paperwork would be better off spending this time on planning and business strategy. Which brings us back to where we started...

 

[z103]

accountant fees would certainly make a huge impact in the overheads.

Our (final) accountant bill was nearly €4000. This is what prompted us to invest in accounts software, and it was the best business decision we've made.

You seem to know how much a P30 return for one employee would cost, so how much would the rest cost? (p35, p60, p45s etc)

What makes you think that accountants here don't offer similar services?

this does;

There is a big difference between outsourcing routine accounts work and not knowing what your ongoing financial and cashflow position is from day to day. While (in my opinion) its a good idea to use an accountant or bookkeeper for the former, its a bit much to expect your accountant to hold your hand to the extent that you give them responsibility for the latter.

They don't need to offer this service, because they're getting thousands anyway for doing standard returns.

I would argue that a business owner who spends several hours every month on basic compliance paperwork would be better off spending this time on planning and business strategy.

...and I would argue back, that once all your accounts are in a computer system it's far easier to spend time on planning and business strategy.

I've been there. I've paid the accountants' bills, and been in the dark with cash flow etc. I certainly wouldn't want to go back to that situation.