Accounting myths

Accounting is a vital aspect of running a business in the UK, and the topic is surrounded by many misconceptions and myths. In this blog post, we will address some of the most common accounting myths and debunk them to help you better understand the importance of proper financial management for your business.

 

Myth 1: You only need an accountant when your tax return and accounts are due to be filed

 

Many business owners believe that they only need an accountant during “tax return season”. However, this is far from the truth. An accountant can help you with many aspects of your business, including financial planning, budgeting, bookkeeping, and compliance with UK tax laws and regulations. They can also provide valuable advice on investment strategies and help you make informed decisions that will benefit your business in the long term. 

A corporation tax or personal tax return is currently submitted once a year in the UK (until MTD ITSA comes into play in 2026) and by only having accounting support once the period in question is over and therefore it’s too late to make any operational changes, it means you have lost important planning opportunities.

 

Myth 2: Accounting is only for large businesses

 

Another common misconception is that accounting is only necessary for large businesses with complex financial systems. In reality, accounting is essential for all businesses, regardless of their size. Accurate financial records are crucial for making informed decisions and keeping your business financially stable. An accountant can help you develop a financial plan and ensure that your finances are well-managed, regardless of the size of your business. They can also advise on the best way to store and access your data and for how long, to ensure you don’t come a cropper if HMRC come knocking.

 

Myth 3: Accountants are too expensive

 

Many business owners believe that hiring an accountant is too expensive and that they can handle their finances on their own. However, hiring an accountant can save you money in the long run. They can help you identify areas where you can save money and reduce costs, and ensure that you are compliant with all relevant tax laws and regulations. Additionally, they can help you avoid costly mistakes that could result in penalties and fines (which often increase the longer an error/delay continues).

 

Myth 4: You can rely solely on accounting software

 

Accounting software can be a valuable tool for managing your finances. However, it is not a replacement for an accountant. Software cannot provide the same level of expertise and advice that an accountant can, and it cannot replace the human touch when it comes to financial management. Additionally, software can be prone to errors and may not be suitable for all businesses, particularly those with complex financial systems. Having an accountant support you with your software use can improve its accuracy – thinking of the phrase “rubbish in, rubbish out”, a system is only as good as the data that is input in the first place. Depending on the software you use, they can help create bespoke reports for your business within the system so you can keep an eye on your numbers in a format and using specific metrics that make sense to you and your business. 

 

Myth 5: Accounting is boring and unimportant

 

Many people believe that accounting is a boring and unimportant aspect of running a business. However, accounting is a vital part of financial management and can have a significant impact on the success of your business. By keeping accurate financial records and making informed financial decisions, you can ensure the stability and growth of your business. At IJC Finance we love the parts a lot of business owners – putting it frankly – despise. As self-confessed numbers nerds our role we make it our mission to bring more interest to what your numbers are telling you and help make things easier to understand without too much technical jargon.

 

Conclusion

 

Accounting is an essential aspect of running a business in the UK, and there are many misconceptions and myths surrounding this topic. By debunking these myths, we hope to help you better understand the importance of proper financial management and the value that an accountant can bring to your business. By working with an accountancy firm like IJC Finance you can ensure that your finances are well-managed, compliant with tax laws and regulations, and positioned for long-term success. Contact us for more information on how we can get you started. You can read more on the services we offer here.