There has been a surge of internet resources designed to allow contractors to handle their own accounts with greater ease. However, the tendency of some contractors to try and tackle their accounts with little or no professional expertise has also created a growing number of problems related to accountancy errors. Not hiring dedicated contractor accountants might seem like a way to save money in theory, but in practice it will typically lead to long term problems. Here are a few of the issues that can arise when contractors conduct their own accountancy.
Lack of Time
Running a contracting career is not necessarily an easy option; although many people find that it is an extremely rewarding one. Because of the need for contractors to keep their skills constantly in demand, look for suitable contract work and also observe any other obligations they might have, adding the burden of accountancy often means that a contractor is biting off more than they can chew. Even if they are qualified to do so, a lack of time can often lead to rushed and inaccurate book keeping. An external accountant will therefore free up a lot of time in a contractor’s daily life.
Lack of Awareness
Some contractors are so focused on saving money wherever they can that they fail to identify what might be the best practices. It is one thing for an experienced individual to conduct their own accounts, but it is another issue entirely when an ill-prepared contractor takes control. Not only will the accounting be prone to errors, but there is also a risk that opportunities to create new profits might be missed. A specialist accounting service will be far more used to looking for these specific financial situations than most do-it-yourself accountants, and a missed opportunity might not arrive again for quite some time.
Lack of Legal Observance
As has been hinted at, engaging in their own accountancy often leads many contractors into making financial errors. This might arise from a lack of time or accounting expertise, but some flaws in accounting records can result in unwanted legal implications. However, trouble in this area doesn’t only lead to potential negligence with regard to necessary legislations, as ill kept or error strewn accounts can lead to other implications too.
Some contractors do manage to successfully navigate the potential problems posed by in-house accounting, but a far greater proportion decides to make use of an external service to ensure everything is fully in order. Usually, the biggest incentive for a contractor to conduct their own accounts is to save money, but here at ICS our dedicated contractor accountancy and administrative service is especially designed to help you make the most informed decisions possible as a contractor. Have a look at our contractor tax calculator to see how much our services and advice could actually be saving you. We have years of experience when it comes to working alongside contractors across numerous industries, so please call us on 0800 195 3750 or email us at email@example.com to find out more.