Fixed fee accountancy is a way of making accounting services more easily affordable and accessible to a wide range of businesses.
It is often the case that when you decide to use the services of a professional accountant, you would do so for your end of year accounts and submitting tax returns.
Therefore, the accountant would quote you an amount payable for carrying out these specific tasks.
However, there are two things to consider here:
- If you want the most of accountancy support for your business, you should think beyond the issue of your end of year accounts. What added value might an accountant bring your business all year round?
- If you were to treat your accountant as more of a business advisor and problem-solver, than simply providing one form of service, would this not end up costing you a lot more?
One the one hand, an accountant could prove extremely useful to you as a resource to draw on for future business planning.
On the other, you would then have to budget for this.
But not if you were to use a fixed fee accountancy service.
How Fixed Fee Accountancy Works
With a fixed fee accountancy service, you pay for the support of an accountant for the whole year, but at an agreed, fixed fee.
This means you can budget for this kind of expert support and, importantly, you can maximise the benefits it offers.
It offers the perfect opportunity to receive dedicated accountancy support, including expert advice and guidance, to help your business grow and develop.
And all this comes without having to worry about mounting costs or hidden extras.
Typically, you pay a single, fixed monthly fee, which then gives you the ongoing services of professional accountancy service.
Who Benefits from Fixed Fee Accountancy?
Often smaller businesses, startups, contractors and sole traders fail to capitalise on the benefits that consistent accountancy services can offer.
But in fact, they may be the businesses who stand to gain the most from fixed fee accountancy.
They get caught up in a routine where they only consult an accountant when it comes to their annual accounts, or when some emergency arises, such as an unforeseen expense or tax bill.
But the benefits of accountancy go far beyond this.
Many business owners find themselves stretched. They are having to manage the core aspects of their business and the demands of additional, but essential, administration can be hard for them to make the time to focus on.
If they are resource-poor in specialist functions, such as their financial management, they run the risk of either neglecting these fundamental areas of the business, or not being able to carry them out properly.
Conventional, professional support, paid by the hour, may seem like a commitment too many, but a cautious approach to accountancy comes with its own risks.
Where margins are tight, the temptation might be to take more of a DIY approach. But, as we have seen, if a business owner is already stretched for specialist resources, how much time can they truly dedicate to this type of work?
What Can Go Wrong with Your Own Accounting?
There are several mistakes you can make with your accounting as a smaller business, if you do not decide to use the services of a professional accountant.
One is who you rely on for accountancy advice. You may have well-meaning friends, family or colleagues who are willing to offer you advice, but will it be the right advice?
Just as businesses are all different from one another, so the advice they receive should be tailored to fit their specific circumstances and objectives.
Do not simply base your accountancy decisions on what non-accountancy professionals tell you, or on what you have read elsewhere.
Professional accounting advice will help lay the right foundations for your future financial management, and, using a fixed fee accountancy service, it will always be up to date with how your business is developing.
Other areas of difficulty that many small and even medium-sized businesses can experience are to do with transactions.
For example, if you reconcile your receivables late, then you can find your account records are inaccurate, and that this grows. If you then wait until your end of year accounts to try and catch up, you could be left with a real headache.
Entering financial data regularly and accurately is essential. Another is that invoices you owe to suppliers go unpaid, leading to supply chain problems further along, or even a bad credit rating.
Are you keeping a close eye on your expenses? Where you have cash expenses, especially, they can prove difficult to remember or record accurately. If you do not do this, you can ultimately end up paying more in taxes than you need to.
Are You Reading Your Reports?
Keeping on top of your accounts can feel like a full-time job if you do not have the benefits of an accountancy service provider to support you.
You need to be fully aware of the health of your business, which means generating and reading a regular number of reports.
These will tell you about the status of your cash-flow, your accounts receivable and payable, your income and your balance.
Without this visibility, you risk being unprepared for the future, and you are likely to lack understanding of what your true growth potential is.
A fixed fee accountancy service can help you keep on top of your figures and will interpret them for you as you require.
This kind of clarity is essential if your business is to thrive and grow so that you can reap the rewards.
Your Trusted Business Adviser
The services of an accountant are not just about routinely completing your annual tax return, but nor should they also be about troubleshooting.
If you use your accountant effectively, they can be your trusted business adviser, helping you reach your full potential.
They will work to help you find ways to grow your business, as well as looking after the essentials in your accounting.
Fixed fee accountancy services give you this kind of access, providing essential, trusted support to your business.