UK MICRO-BUSINESSES are more likely to make mistakes with their expenses than in any other part of their financial management, according to research from online accounting system provider FreeAgent.
In a poll of accountants who work with micro-business clients, more than half of respondents (53%) said that expenses was the most common area where these clients made mistakes in their accounts.
Accountants said they regularly have to clarify the guidelines for expenses as many micro-businesses struggle to understand what they can and cannot claim. Around 29% of accountants said that trying to claim back expenses they weren’t entitled to claim was the area where micro-businesses made the most mistakes. Meanwhile, 24% said the biggest area for mistakes was micro-business owners failing to claim back expenses that actually were permissible.
In addition, a third of respondents said that the most common area for mistakes was their micro-business clients’ bank balances – and the fact clients do not accurately record money in and out of their businesses.
Ed Molyneux, CEO and co-founder of FreeAgent, said: “More than half of the accountants we surveyed said that expenses was the most common area for micro-business clients to make mistakes in their accounts, so it’s clear that this is a big issue.
“Accountants regularly have to deal with the fall out of micro-businesses trying to claim back expenses – whether it’s trying to claim back expenses that they’re not allowed to, or failing to claim expenses that are actually permissible.
Stephen Franklyn of Lithium Systems discusses why accountancy firms should prioritise cyber security and how they can take steps to protect both data and their reputation
Gavin Disney-May, chairman of MyFirmsApp, compares technological developments and their take up by accountants in the UK and in America
Justin Dolly of Malwarebytes looks at what accountants can do to protect their data and minimise cybersecurity risks
MTD cost estimates are not based on 'facts', and are 'disbelieved' by most small businesses and sole traders, says Lords committee chairman