Accounting: The Age-Old Profession, Employing New-Age Technology
"Annual income twenty pounds, annual expenditure nineteen [pounds] nineteen [shillings] and six [pence], result happiness. Annual income twenty pounds, annual expenditure twenty pounds ought and six, result misery." (Mr Micawber, quote from David Copperfield, by Charles Dickens)
The 19th century and the beginning of the accountancy profession
The accountancy profession in the UK started to develop in the first half of the 19th century. It grew largely from new laws on bankruptcy, insolvency, and the winding up companies. In the 19th century, landing up in the debtor’s jail was the fear of many. Charles Dickens was certainly fearful, a fear instilled by the experience of his father, whom the author described as "a jovial opportunist with no money sense", who was imprisoned in Marshalsea Debtors’ Prison in Southwark under the Insolvent Debtor’s Act 1813 because he owed a baker, James Kerr, £40 and 10 shillings.
Charles Dickens fear of accounting often comes up in his writing, finance, he wrote, is "splendid, massive, overpowering, and impracticable". Dickens felt that accounting was so beyond human control that only luck could help the hapless out in the face of the chaos he perceived was created by "numbers" and "paperwork".
The 20th century picture of accounting
Today, many people find doing accounts daunting, others just boring, but freelancers, contractors and small business that just leave their accounting to "luck" and do everything at the last minute are asking for trouble: how can you build a robust business without robust accounting? Businesses and individuals with no handle on their accounts inevitably end up in a mess with their personal and business finances, just as they did in Dickens’ time.
Accounting can be complex, but the rudiments of it remain the same as they ever were, you account for what is coming in and what is going out. In this era, at a time when the commercial world is more competitive than ever, where we operate in a global market place, where a multitude of laws relating to business and taxation might and probably will affect you, there are many advantages to employing a good, modern accountant.
What is a modern accountant?
Modern, up-to-date accountants are not the fusty number crunchers they were once thought to be! Modern accountants offer all of the normal services you would expect them to provide but a lot more besides; expert advisor, protector of your business interests and your wealth, and guide along a straight path in compliancy terms as well. Your accountant should be professional in every respect, trustworthy, dependable, and should have his or her expert eye on the bigger picture while you run your business.
The modern accountant will encourage you to be in control of your finances, not only by offering you expert advice and services, but also by providing access to technology. Accountancy and technology ? think about it, surely this is a marriage made in heaven! Imagine: fully integrated online accountancy software, designed to help you grow your business, to save you time, prompting you on matters such as expenses and VAT, offering you access to HMRC, your bank statements, and allowing you to upload receipts. This is accounting in real time, this is the height to which technology has taken accounting.
The 21st century is the technological ageTo recap: while the rudiments of accounting remain the same in the 21st century, modern accountants provide access to online bookkeeping and accounting software, because technology-driven real-time accounting has never been more necessary than now! When you are in control of your finances, then and only then can you begin to build a robust business and increase your personal wealth.
The self-assessment tax return deadline
Take the annual self-assessment tax return deadline. In around October time every year without fail, a panic erupts among taxpayers who realise that the time has come to file their self-assessment tax return and find the money to pay the tax due by January 31st. Although owner managers of limited companies will file accounts at whatever time of year their year-end falls, many, many taxpayers are obliged to file a SA tax return before January 31 annually. Anyone who lets out a room, has a buy-to-let, earns income online, or earns any income that isn’t accounted for through their business or via PAYE, over the allowable threshold, lawfully must declare this additional income for tax purposes by filling out a self-assessment tax return and paying any tax due by 31 January.
My accounts are in disarray!
Many taxpayers will find themselves with their accounts in total disarray, even in October, and they will have to make a dash for it to meet the January 31 self assessment deadline or pay a fine. They will not have the time, and few will have the knowledge, to really think through their accounts, look at the year prior and the forecast for the following year to see what might go back or what could be taken forward. Few laypeople understand how to do accounts, few untrained people really understand tax planning.
Hire an expert accountant that gives you access to online accounting software
To avoid the panic and stress of do-it-yourself accounting there is a very simple solution: hire an accountant that offers online bookkeeping and accounting software. This way you will be in control of your accounts all year round.
How online bookkeeping and accounting can grow your business:
- It will keep your accounts in order in real time all the time;
- It will give you a better picture of your business and personal finances;
- It will give your accountant opportunities for effective tax planning;
You will understand more about your business and more about accounting for your business.
With intelligent online accounting software, the worry about which expenses to claim is no longer an issue as the software should prompt you, whether for your home-as-office, your mobile phone, broadband connection, or mileage. You should be able to see, in real time, at any moment what income your business has coming in and what money is going out. If you are VAT registered, the software should prompt you as to which scheme you should be under.
A regular monthly 20 minutes to load up your receipts and invoices and check your bank statements online will leave your accountant to do what you really pay them to do. When the January 31 deadline approaches your self assessment tax return will be filed in good time and the money to pay what you owe will be waiting.
A last word from an industry expert
Sumit Agarwal is the managing partner of DNS Associates, the accountant that many small businesses, contractors, and freelancers trust. With the aid of its in-house cloud-based bookkeeping, accounting and business growth software, provided FREE to all clients, businesses tend to prosper under DNS. Sumit’s advice is: "Anyone struggling with their accounts, who is running a business or earning income outside PAYE should hire an accountant. Besides all the pitfalls a good accountant can help you to avoid, there are many other advantages of seeking the help of a professional accountant, particularly if that accountant offers access to online accounting software. You will save money and probably earn a lot more too."
We think Charles Dickens would agree that modern accounting married to technology makes very light work of "numbers" and "paperwork". You should look for a firm that offers fixed fees, a guaranteed service, expert advice, FREE integrated accounting software, and weekend opening. Modern-day accountancy, designed for modern-day businesses, backed-up by modern-day technology, makes for a splendid service!
Any questions? Schedule a call with one of our experts.