More and more people are starting a business these days. This is also advantageous for several reasons. The job market is very different than it used to be. Nowadays it is no longer easy to get a permanent contract. There is therefore less job security and for many people that was the reason to enter and remain in paid employment. At the same time, in this digital age it is much easier to start your own business. In many sectors, for example, you do not need starter money and therefore you run less risk. It is of course very nice to work as an independent entrepreneur. It gives you a lot of responsibility and at the same time it is also challenging. Of course, there are certain obligations involved. For example, you are obliged to keep proper administration.
SBS Consulting provides incorporation services to Singapore-based companies. Additionally, we also offer secretarial, bookkeeping, accounting, taxation, GST, XBRL, and payroll services.
Many starting entrepreneurs therefore wonder whether they need a bookkeeper or account. This is not mandatory in the Netherlands, but in some cases it can be sensible. In this article we take a closer look at this question. We discuss several propositions and on that basis we try to answer this question. But first, let's briefly discuss the difference between a bookkeeper and an accountant.
What is the difference between a bookkeeper and accountant?
The terms are often used interchangeably. This also makes sense, because they both deal with the administration. However, there are a few important differences to mention. In the first place, accountant is a protected title. This means that you must complete a thorough education or study before you can call yourself that. In practice, an accountant has often also completed a training course, but this is not mandatory to bear the title.
Another point is that accountants are mainly there for the more smaller companies. However, this is not to say that there are no accountants who do the accounting of small businesses. The other way around is also common. But this is the exception rather than the rule. For some companies it is even mandatory to hire an accountant. These are very large companies. Another point is that the bookkeeper is usually cheaper.
The size of your company plays an important role
The administrative size of your company is important in determining whether or not you need an accounting professional. For example, are you a self-employed person without staff? Do you usually work from home and do you hardly have any complicated administration? In that case, it is certainly not necessary to engage an accountant. You can then choose to hire someone for accounting. Perhaps you have absolutely no experience with accounting yourself and for that reason you would like to outsource it. If you do have some experience, you can also choose to use an accounting program to buy. Nowadays you have many accounting programs that are very easy to use. You don't need accounting knowledge for it. If you fill in the details there correctly, you can file most declarations yourself.
We do recommend that you engage an administrator for a final check at the year-end closing. Mistakes in accounting can have far-reaching consequences.
Which legal form are you going for?
The legal form also plays an important role in the choice. When you start a business, you can choose from different legal forms. Many self-employed people opt for the 'sole proprietorship'. Please note: this does not mean that you cannot employ staff. In a sole proprietorship, the owner is personally responsible. In addition, there are several other legal forms that you can think of. Larger companies often opt for the legal form 'private limited company'. In many cases, this is more attractive from a tax point of view. You do not have to pay profit tax, but corporation tax. This percentage is often lower, but with a BV there are also additional obligations. You have deposit obligations.
Certain legal forms are required to submit annual financial statements to the Chamber of Commerce. In principle, this applies to all legal forms except the sole proprietorship and general partnership. An annual statement is an official document and consists of a profit and loss account, balance sheet and an explanation of these two matters. It is best to have these made by a professional. In those cases, we certainly recommend that you use an accountant. This is the best person to prepare the annual accounts. Smaller annual accounts can also be prepared by an accountant. Do you have a very large company and do you meet certain conditions? Then you may be required to have an audit carried out.
The advantages and disadvantages at a glance
We discussed some considerations above. In the last section of this article, we'll take a look at the advantages and disadvantages.
The benefits of hiring a professional
An important benefit of hiring an accounting professional is that it can give you peace of mind. The point is that accounting can be quite stressful. Perhaps you are somewhat anxious and you would like to make sure that everything is okay with a possible check. In that case, it's not a bad idea to hand over the responsibilities.
We do recommend that you check whether the bookkeeping office or accountancy firm has liability insurance. An accounting office is not obliged to conclude this. You always remain responsible for the administration, so even if they make mistakes at an accounting office. An accountancy firm is obliged to take out liability insurance. However, if you want to save costs, we recommend that you go to an accounting office. Although it is not mandatory, many offices do.
Another advantage is that it can save time to outsource your administration. It will cost you something, but you will get a lot of time in return. You can use this time for business activities or other matters. If you have little experience with administration, an accounting office can arrange this for you much faster. You can also choose to outsource part of your administration. Maybe you can do the VAT returns yourself, but you would like to have the year-end close done. That way you can also save money.
The cons
The disadvantage of outsourcing the administration is that it costs you money. At the same time, you no longer have control over your own administration. Many people find it important to maintain control. There is also, of course, a trust issue. If you have any problems with an office, you will still be dependent on them. In addition, you should also entrust the administration to an office. Before you start doing business with an administration office, we always recommend that you first check whether you are a good match in terms of character and working method.
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