A new survey from Business4Beginners reveals that 61% of startups are avoiding using accounts.
61% of New Business Plan To Avoid Using Accountants
A survey of new businesses by advice website, Business4Beginners has revealed 61% plan to avoid using accountants.
Just 28% of the 962 survey respondents indicated they would be using an accountant for their tax returns, while 9% were still undecided.
This indicates that, as the squeeze on living costs continues to stifle the economy, new businesses are opting to save money by completing tax returns themselves, running the risk of incorrect submissions and overpaying on their tax bills.
Meanwhile, of those considering using DIY accounting software, 58% said that ‘ease of use’ was the most important feature, followed by 35% who stated ‘price’ as the biggest factor.
1 In 5 UK Businesses Fail Every Year
It perhaps shouldn’t be surprising that startups are focusing on cost-cutting measures in their formative years, given that it’s estimated 1 in 5 businesses fail in the UK every year.
However, Paul Bryant, the founder of Business4Beginners warned “I understand that businesses are desperately looking at ways to cut costs, especially while trying to get an idea off the ground. However, they should think carefully before opting against hiring an account.“A good accountant won’t just submit your tax returns for you. They will advise on the various tax-saving measures that are available to small businesses and can often end up saving you money. And that’s not to mention the time and effort they save business owners from trying to do it themselves. That alone can be the difference between the success and failure of a business.”
The Rise Of DIY Accounting
The findings may also indicate a growing understanding of bookkeeping knowledge within the business community that has increased the confidence of entrepreneurs to take on accounting tasks themselves. This has been driven partially by an increase in easily available information online, and vast improvements to accounting software that has taken much of the manual work away.
However, given the potential legal and financial consequences of submitting incorrect tax returns, most businesses would be advised to resist the temptation to avoid using accountants.
If new businesses are looking to save costs, they may look to other measures such as zero-cost advertising and PR efforts or negotiating with suppliers rather than scrimping on something which could be potentially fatal when getting their business off the ground.