The hidden costs of a bad accountant and how you can avoid them

small business owners discussing their accountant

Many small business owners assume that as long as their accounts are filed on time, their accountant is doing a good job. But what if your accountant is actually costing you money, time, and stress without you even realising?

A bad accountant doesn’t necessarily mean someone making huge mistakes—it could simply be an accountant who isn’t proactive, doesn’t provide clear advice, or leaves you to deal with HMRC alone. The consequences of this can be far more expensive than just paying for poor service.

Here’s a look at the hidden costs of a bad accountant and how switching to Purple Accounts can help you avoid them.

1. Missed Tax Savings – Paying More Than You Should

Did you know that many small businesses overpay their tax simply because they aren’t claiming all their allowable expenses and reliefs? A bad accountant won’t take the time to understand your business or explore opportunities to reduce your tax bill.

📌Did you know? According to the Federation of Small Businesses (FSB), UK SMEs collectively overpay millions in tax each year due to poor advice and lack of tax planning.

How Purple Accounts Helps:

✅ We make sure you claim every allowable deduction – from business expenses to capital allowances.

✅ We offer proactive tax planning to reduce your tax burden legally and efficiently.

✅ We ensure you stay compliant with HMRC’s latest regulations while maximising tax efficiency.

2. Penalties & Fines – The Cost of Compliance Failures

Late filings, VAT errors, and payroll mistakes can lead to hefty HMRC penalties. If your accountant isn’t staying on top of deadlines or advising you correctly, you could be paying the price.

📌 Did you know? In the 2022/23 tax year, HMRC issued over £248 million in late filing and inaccuracy penalties to businesses in the UK.

Common Penalties for Small Businesses:

Late VAT returns: £200+ fines and interest on unpaid amounts.
PAYE and payroll mistakes: Automatic penalties starting from £100.
Corporation Tax late submission: Minimum £100 fine, rising if further delayed.

How Purple Accounts Helps:

✅ We track your deadlines and ensure filings are submitted on time.

✅ We handle payroll & VAT compliance so you avoid fines.

✅ We liaise with HMRC on your behalf, so you don’t have to.

Everything is in one fixed monthly package.

3. Wasted Time – DIY Accounting Drains Your Productivity

If your accountant isn’t providing clear, proactive support, you’re probably spending hours every month trying to figure things out yourself—time that should be spent growing your business.

📌 Key fact: A survey by QuickBooks found that UK small business owners spend an average of 15 hours per week on financial admin – that’s nearly two full working days lost!

How Purple Accounts Helps:

✅ We take care of your bookkeeping, payroll, tax returns, and HMRC queries

✅ Our management accounts service gives you real-time insights into your business finances.

✅ We help you stay organised and stress-free, so you can focus on running your business.

Learn more about our accountancy outsourcing service.

4. Lack of Business Insights – Stunting Growth

A bad accountant might just file your accounts at year-end and leave you in the dark about your financial health. Without regular, clear financial reports, you could be making business decisions blindly.

📌 Key fact: Research by Xero found that only 50% of small business owners feel confident in making financial decisions—often due to lack of clear financial data.

How Purple Accounts Helps:

✅ We provide management accounts so you know how your business is performing throughout the year.

✅ We explain your numbers in plain English, so you can make informed business decisions.✅ We help you plan for the future, not just look at the past.

Why Small Business Owners Are Switching to Purple Accounts

If you feel like you’re not getting the service you deserve from your current accountant, you’re not alone. Many business owners switch to Purple Accounts because they’re tired of:

❌ Accountants who don’t return calls or emails.❌ Being left to deal with HMRC alone.❌ No tax-saving advice or support.❌ Late filings and unexpected penalties.❌ A lack of financial clarity and insight.

At Purple Accounts, we provide a proactive, hands-on service tailored to small business owners who want peace of mind, clear advice, and financial success.