As more and more businesses start to use accounts software, both traditional programs such as QuickBooks and Sage and online services such as FreeAgent and Xero, I am being asked more and more frequently  why the accounts which I have prepared are different from those produced by the client.

The possible reasons are so many that it is impossible to answer in detail but I can make some general points which may help explain most of the discrepancies.

1. Accountants are not as pedantic as you may think. We do not insist on 100% accuracy in everything we do. Most things but not everything! (We may ignore small discrepancies – often referred to as ‘materiality’)
2. We do not check every figure you have entered in your records.
3. Accountants use different headings in their accounts than those used in your program. Worse still different accountants use different headings.
4. Like you, accountants sometimes find it hard to classify an expense (Is a printer cartridge Printing or Stationery?). And sometimes we classify the same expense under two different headings – the first time we use Printing and then we use Stationery because it seems better.
5. Limited company accounts are called statutory accounts because they are prepared ‘under statute’ i.e. the Companies Act. Accountants therefore follow the rules under the Companies Act as well as rules imposed by the Accounting Standards Board. Your program doesn’t have to do this so the accounts will look different.

What does all this mean?

• Your accountants’ accounts are almost certainly going to differ from the ones in your accounts program. Personally I would be more worried if they were the same because either you can prepare accounts as well as your accountants or, worse still, your accountants haven’t found any discrepancies because they haven’t checked your records!
• If the net profit differs noticeably from your figures you should ask your accountant to explain (in general terms) why.
• If you want to know how they have summarised your expenses ask for details of the postings in their accounts program. That will show you how expenses in your accounts are transferred into the statutory accounts.