Accountants, love ‘em or hate ‘em, are here to stay and in business you are never far from considering expenditure and income. Here are some ideas for freelancers with small businesses.
As a Freelance Designer and Project Manager I want to be designing and managing design as my main day to day priorities but like everyone else, I need to pay my taxes and ensure that my books are in order. As April 6 is the start of the new fiscal year in the UK,it is worthy of a news item in celebration of a new tax year 
The way I deal with my tax obligation is, I believe, an optimum, no fuss way to ensure accuracy in my record keeping whilst reducing my accounting fees to a minimum each year. Here’s how I go about it:
Find the right accountant
I work with an individual Chartered Accountant specialising in Small to Medium Enterprises [SME's] as he has an understanding of running his own business as well as dealing with companies of my size. He is honest and follows guidelines for keeping books strictly which is important for ‘peace-of-mind’ when submitting a tax return – if the books are audited then there is no need for concern that there may be hidden penalties or drawn out negotiation with the Inland Revenue.
What is particularly good about the guy is the fact that he will go through my accounts with me – demonstrating where he has corrected minor mistakes but also giving me a different tutorial year-by-year as to how the presentation of my monthly spreadsheets could be improved. He is also very helpful during the rest of the year when I [very occasionally] call him if there is a calculation or record I am not sure about.
OK, enough of the discount friendly compliments to my accountant.
Create your own spreadsheets
Essentially I have two options – pay for an accountant to sort out all of my receipts and records then calculate tax or supply the books with spreadsheets and receipts completely ready to be checked and submitted as a final estimate. I have chosen the option to create my own spreadsheets and log my own expenses which has a few benefits:
1. Learning and practicing good book keeping skills
2. Greater monitoring in detail of monthly income and expenditure
3. Reduction in accountants fees
As a Sole Trading Freelance Designer it is easy to create, maintain and submit accounts as there are no staffing considerations [except payment to other freelance programmers or designers who must then account for this in their own records]. There is also non of the extra maintenance that comes with owning a Ltd or Plc company. It’s all very easy to maintain and manage.
Pay promptly
Hate late payers? So do I and accountants definitely are even less impressed. Iusually respond to any invoices that are sent to me within 48 hours and at the most within 1 week whether there are 28 day terms or not. My advice would be to pay your accountant within 1 week of receiving your bill – just to impress them with your reliability – this has rewards in that your accountant will know he can rely on your commitment to him and therefore he or she will [usually] commit time and advice in return.
Conclusion
Building up a trusting, reliable and secure working relationship with your accountant is the key to ensuring you get the best advice and commitment in terms of making the most of your tax opportunities as a freelance business owner whilst creating tax returns that stand up under close scrutiny. Often, the cheapest option is not the best but it is worth shopping around a little and maybe interviewing potential candidates over the phone to see what they expect from you and what you can expect in return for your money.
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