THE SUNDAY TIMES - BUSINESS DOCTOR
11 July 2010

TH writes: I set up my business as a sole trader last January but am finding the book-keeping eats up a lot of my time. Should I employ a part-time book-keeper to come in each week or would I be better off getting a tax accountant to do all the work for me at the end of the year?  I imagine the second option will be cheaper.

In any start up situation a considerable amount of time needs to be dedicated to running and promoting the business writes Eoin Gallagher, Audit Manager with Horwath Bastow Charleton in Limerick.  Enlisting a part-time bookkeeper or accountant is a worthwhile exercise as it will free up your time to be better spent elsewhere.

Deciding on the best option for you, consideration needs to be given to areas such as VAT and PAYE.  If the business is registered for VAT, regular VAT returns need to be filed with the Revenue Commissioners.  Also if the business has employees it will be registered for PAYE and as such it will need to file regular PAYE returns with the Revenue Commissioners.  All VAT and PAYE returns need to be filed on time in order to avoid interest and charges.  Consequently you might consider hiring a bookkeeper, who has the ability to complete VAT and PAYE returns, for perhaps one or two days a month who would record all your transactions for the month and ensure that your returns are filed on time. 

Recording transactions on a monthly basis will also afford you the benefit of being able to monitor how your business is progressing.  Monthly income and expenditure reports can be produced allowing you to review and control expenditure and take any necessary action on a timely basis.  At the year end you then forward all the information prepared by your bookkeeper to your accountant who will produce a set of financial statements and complete your Income Tax return.  This will ultimately reduce the amount of work to be completed by your accountant thus reducing your fees for the year.