Start up advice

[Tommo_7811]

Hi all,

I have been a long time lurker of these forums and finally decided to signup!

Firstly, apologies in advance, this could get quite lengthy...

I am in full-time employment, but have decided to set-up a business that I'll be running in the evenings/weekends on a part-time basis. It will be an online mail-order business. This is something I have done in the past and looking to start again. My initial capital will be quite low at around £1,000-£1,500 and this will fund my first lot of stock. However, I intend to invest a further £500 each month from my salary, at least for the first 6 months.

The only thing that is holding me back is the accounting side of things, as it's something I find quite daunting.

From the offset, I would like to form a limited company and I will be using an accountant to ensure everything is done by the book! Will an accountant be willing to take on something such as this, considering it's a part-time venture on quite a small scale? What kind of cost would I be looking at (roughly!) and typically when would I be paying it?

I'd also be looking to get some kind of accounting package, such as Sage, QuickBooks, but not 100% sure on which yet. Then keep separate folders for invoices, bank statements, etc.

So basically I just want to know if what I have planned is the right way to be doing it and just some general 'tips and tricks' from those that have done it already!!

Many thanks in advance

 

[Mitchells Bristol]

Hello Tommo

Yes - you will find lots of accountants willing to look after your limited company for you, some of whom you will probably find on this forum.

Cost wise I would imagine it will vary from one accountant to another - you should probably expect quotes of between £350 to £600, and go with whichever accountant you feel comfortable with, you feel you can trust and is able to communicate clearly with you and answer all of your questions!!

Many accountants these days set up manageable monthly standing orders for clients, but again it will depend upon your selected accountant. Many still charge a one-off fee on completion of the accounts. From your perspective, a one-off fee will delay the cash outlay for well over a year, but you may prefer to chip away monthly rather than taking the big hit.

Unless you are already familiar with Sage or Quickbooks then they may not necessarily the best software packages for you so do shop around and trial a few packages to find the best fit.

The biggest tip I can give you is to get an accountant on board early, and don't wait until the end of your first year as said accountant will be able to give you all the financial tips and tricks you will need!

Good luck with the venture!

 

[Tommo_7811]

Many thanks for your response.

Didn't think of finding an accountant through here, that's something I'll look to do. Costs you quoted seem a lot less than I was expecting and a monthly arrangement of some kind would be great.

I plan to get an accountant before I even start trading to be honest. I have ran a similar business before (as a sole trader) and wasn't the best at keeping that side of things up to date and in good order. So an accountant is needed just to give me a kick in the right direction if anything!

Do accountants tend to mind a company already being set-up? As I have heard an accountant will charge a fair amount of money to do this! Looking through posts on here, seems I can do it myself via a third-party company.

 

[Mitchells Bristol]

Didn't think of finding an accountant through here, that's something I'll look to do.

Do look for a personal recommendation first. Whilst there will, no doubt, be some good accountants on here....if you have a friend, colleague or family member who can give you a personal recommendation that would be my first port of call if I were in your shoes.

Do accountants tend to mind a company already being set-up? As I have heard an accountant will charge a fair amount of money to do this! Looking through posts on here, seems I can do it myself via a third-party company.

Realistically, I don't think an accountant will mind, as long as the incorporation is done by a professional. Most will just review the incorporation paperwork and ensure the company is set up in the most efficient manner.

I have worked for accountancy firms charging anywhere between £250-£1,000 to set up a limited company!! Again, there are posters on this forum who seem to handle company incorporations for free! So it just depends on who you go to. I use a formation agent for my company formations who charge £59 and they do a very good job.

 

[Truemanbrown]

It is not that difficult to set up a limited company. It is not as though you will require a company with different types of shares in issue. You could do it online yourself here.

As for the accounting aspects, most accountants will offer a free consultation to entice you to go with them. Personally, I would be quoting you around £300 to £350 to you.

When you meet prospective client's, they should be asking you questions about your current circumstances and then planning a strategy around that.

 

[kevin.doran]

Annual LTD accounts for £300-350?

 

[Tom McClelland]

Annual LTD accounts for £300-350?

Does that surprise you?

 

[Mitchells Bristol]

I'm surpirsed if you are surprised by the level of this quote, judging by the amount you quoted for a job back in January...!!

http://www.ukbusinessforums.co.uk/forums/showthread.php?t=241466&page=3

 

[Tom McClelland]

I'm surpirsed if you are surprised by the level of this quote, judging by the amount you quoted for a job back in January...!!

http://www.ukbusinessforums.co.uk/forums/showthread.php?t=241466&page=3

Perhaps he thinks £300 is expensive for Ltd accounts.

 

[Mitchells Bristol]

Fair point - if it is I'm going to retrain!!

 

[Tom McClelland]

Fair point - if it is I'm going to retrain!!

I guess it depends exactly what is on offer for that price. If the client is expected to supply a top-notch reconciled trial balance and the company's tax affairs are simple then there is no reason for AA + CT600etc to take more than about an hour.

 

[Jeremiah@RHJ Accountants]

Most accountants don't mind if your company has been set up and will just check the formation details are correct which has already been said.

The best thing to do is speak to your freinds and a few different accountants and see which service is best tailored for you.

With regards to accountancy packages there are many people will reccommend but if you have an accountant i am sure they can help you with this.

you may also need some hand holding in the initial stage so getting an accountant that you can regular contact with via phone or e-mail sounds to me your best bet.

My firm Smith Craven charges a monthly fee like many others.

Good luck with the company

 

[apacarada]

Our fees are £60+VAT a month for a company with a turnover up to 70K a year and you get the following.

• register you company
• preparation of annual accounts
• calculation of tax liability
• submission of accounts and tax return
• Tax return for directors (maximum 2 directors, subject to not complicated schedule)
• Monthly Payroll for directors
• Meet regularly, to do bank reconciliation and VAT (if registered)
• Unlimited support and advice throughout the year on tax
• Annual Licence for KashFlow accounting software worth £200 a year
  

KashFlow integrates with a lot of e-commerce solutions and this will be great for you as it will automatically send all your sales into accounting software. E-commerce solutions are great as you do not need to invest on a website you just pay a monthly fee. KashFlow integrates with PayPal and online merchant services. Again this automates a lot of functions and makes life easier. Another great integration is MAilChimp for email marketing which I assume will be necessary for any online business.

All this makes it much more simple and effortless to run your business, especially that your time is going to be limited.

We do provide the training for KashFlow and integration setup for free to our clients.

If this sounds good to you email me.

 

[ILilja]

Just want to add that if you are in the process of checking out online accounting systems, you may want to check out E-conomic as well (and yes, I'm totally biased, as I work here ).

Taking a free trial and playing around with either your own data ('Normal trial without data') or dummy figures ('Normal trial with data') will give you a pretty good idea of the program, and if you decide to stay with us, the first type of trial can be upgraded to a subscription.

If you decide to work with an accountant, they will get free access to your data in the system.

We keep an updated list of UK based accountants who already use E-conomic which may be relevant for you to check out as well. I'm not familiar with their fees, so I guess you'll have to make a bunch of phone calls, before you find the right one for you.

Good luck!

Inger Lilja, Online Copywriter
e-conomic international

 

[TimCaprica]

Since everyone is recommending software I'll try and be impartial (as I work with lots of them).

KashFlow is generally great but Xero has loads more potential add-ons for e-commerce. I think it's likely that your website will dictate what ecommerce system you are using and then you can see if Xero covers it:

http://www.xero.com/advisors/solutions/ecommerce/

or KashFlow:

http://www.kashflow.com/add-ons/e-commerce/

Xero has more but is a bit more expensive. Either way I would definitely suggest you stay away from Sage or Quickbooks.

And since all the accountants are plugging their own offerings. Here is ours starting from £80 per month: e-commerce accountants