It's often said that you get what you pay for and yet we always try our best to 'bag a bargain'. But many businesses have found out to their cost that accountancy is one area where it does not pay to not pay much. As Companies House has rejected one in ten accounts filed in recent months due to formatting errors, it seems that this is one area at least where experience sometimes wins over cost.

Companies House is the body which holds records for all businesses across the United Kingdom and it has issued a plea to businesses to have their accounts in order or risk hefty penalties. If accounts are rejected close to the filing deadline, Companies House issues an automatic late filing penalty of between £150 and £1500 for private companies. As Will Abbott of Randall & Payne, Gloucester, says: "Clients looking to buy at the lowest price do not always understand the benefits of using quality assured professionals such as UK200 Group members, although they do receive a wake up call when accounts are rejected and a penalty is imposed."

There a number of potential reasons for the high rate of rejections: that companies might be using unqualified accountants to file on their behalf; changes to filing format rules have caught out filers; and Companies House has increased its vigilance. Kathryn Cearns, a member of the ICAEW’s Financial Reporting Committee, said new legislation may have caused some of the errors. "As we all know, it only takes one technical breach along these lines for a company to incur a fine and put the directors in breach of their duties for filing accounts." She cites the new Companies Act coming in to force and Companies House’s recent rule changes as a cause for many of the accounts rejections and subsequent fines.

Will Abbott says: “The Compliance and Regulatory side of the business is becoming increasingly price competitive and we continue to compete with unregulated and unqualified practitioners. Unfortunately, like most industries, using the lowest cost does not always guarantee quality.”

“We recently took on a new client in the manufacturing industry in Gloucestershire who had been with his previous accountant for 20 years and thought all accountants were the same. In a short time we’ve reorganised his remuneration package, saving him around £30k a year and we’re in the process of agreeing a research and development claim worth £7,500 for the last 2 years, so in just six months we’ve done more for him than his last accountant did in 20 years. He definitely thinks we’re worth every penny!”

For full information contact Will Abbott at Randall & Payne on 01452 723377