Don’t let cost cutting cost you money


Business owners looking for ways to cut costs are all too often taking action that can have the completely opposite effect and prove a drastically false economy.

Amongst the most popular courses of action small business owners seem to be taking in order to cope with the effects of the economic downturn is either switching to a cheaper accountant or taking on the task of preparing their own books and figures.

However, both these decisions will in the majority of cases only save money in the short term and could have far reaching consequences that end up costing the business dearly in terms of time as well as money.

Lynn Watson, Managing Director of Essex-based bookkeeping firm Office Assistants (has this to say: ‘If you are happy with your accountant and they have been consistently saving you money and providing a good service, but you have been offered a better quote elsewhere, then you should stand back and ask a few questions before making the move.’

Lynn goes on to outline the questions business owners should pose their potential new accountant. ‘Firstly, make sure that you will receive the same level of service. Will they return your calls promptly? Will they deal with your work with the efficiency you are used to? Don’t forget the old adage, ‘you get what you pay for’!’

Lynn’s second suggested question concerns experience and reputation. ‘Find out how long have they been qualified and how long their practice has been trading. Ask if they can provide you with testimonials from satisfied clients,’ she says.

Thirdly, Lynn advises that business owners should think about the level of expertise of the firm’s staff. Generally a practice that charges less will pay their staff less; this often indicates that the staff are under or even unqualified, poorly trained, lacking in experience and possibly unsupported by their employer.

Lastly says Lynn, ‘Check for hidden costs. You may have been quoted a figure to prepare accounts and deal with a tax or VAT return, and you may think that is all you will have to pay. But beware, because some firms will charge you every time you telephone them, and some will even make charges for writing to you! Make sure your quote covers everything.’

In times of economic crisis it is easy to get carried away with cost cutting exercises, focusing on potential savings that could be made by switching to cheaper alternatives or by taking the DIY route. However, it is wise to take some time to seriously consider the consequences of any money saving initiatives, because they could well end up costing far more than they would have done if they had been left alone!

Office Assistants is certified by the Institute of Certified Bookkeepers. They have 20 years experience in streamlining systems and making substantial savings for all types of Essex and London businesses from sole traders upwards.

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