Unpicking accountancy can be more confusing than you might expect. Ask even an experienced business owner what accounts really involve, and you could hear anything from bookkeeping and payroll to management accounts – with a world of other services in between. So, what actually counts as “accounts”? And where does one service end, and the other begin?
An accountant’s role can be wide ranging, with the full picture of a practice’s finances to consider. Areas like compliance checks, tax returns, and recording expenses might be covered by an accountant, but that doesn’t make them part of your accounts.
Instead, a lot of essential financial tasks actually sit within “bookkeeping”. This, in itself, can be divided into two halves:
- Internal systems and controls;
- and data entry.
The first half includes those areas that can only really happen “on the ground” inside your business, such as approving bills and organising bank accounts. The second, data entry, is the process of recording your transactions within bookkeeping software (we recommend Xero), to create a data-led overview of what’s happening within your practice.
Separating these areas from accounts doesn’t mean they’re less important. In fact, they should be separated because they are, in some ways, more important. Accurate, up-to-date bookkeeping is the cornerstone of financial clarity; it’s the foundation of everything else an accountant does. Without data, their hands are tied. However, these tasks can be easily taken care of in-house, or through a third-party bookkeeper. Knowing what can be allocated to bookkeeping allows you to tap into the real potential of both your accountant and your accounts.
But, before diving into what “doing accounts” really involves, there’s one more area it’s often confused with: accounts preparation. Although this falls within the remit of an accountant, it’s not the sum total of what they can do. Rather, it’s just one tiny part of it. In this, a qualified accountant will set to work reviewing and adjusting your bookkeeping data and preparing your formal accounts for HMRC. It’s a crucial step, but if you only work with your accountant at the end of each year, you’ll certainly be missing out.
So, with these things ticked off your list, why should you ultimately engage an accountant?
Beyond the charting of everyday facts and figures, your accounts can do so much more. A dedicated accounts service like ours can help if you’re:
- Unsure about your finances;
- Worried you’re paying too much tax;
- Or preparing to make big decisions.
Doing accounts the right way makes it possible to proactively tax plan, ahead of time, to make decisions that will reduce your tax bill before it’s due. It allows you to gain true financial clarity through management accounts – giving you the understanding and insight to course-correct throughout the year. Importantly, it also means having a team on your side, with the expertise to support you completely.
We work exclusively with dentists, so we know the pressure that comes with running a practice. Owners approaching us might be making six-figure decisions (or even higher), without having access to the strategic knowledge they need to make them succeed. For us, that’s a scary situation to consider. Whether you’re taking on associates, investing in equipment, or simply being led by dangerous assumptions, we believe you should never have to go it alone.
So, if you’d like our help tapping into the power of your accounts, just get in touch.
