Tuesday, 2 June 2009

Crunch it up

I heard mention on the grapevine of a new venture called Crunch.

From their website, Crunch reads as an end-to-end SaaS and accounting service for small limited companies, up to year end accounts.

There are several features of the system which sound great. For example, an automatic text message when a customer pays you.

But what the Crunch website doesn't explain (or if it does, it's well hidden), is who does the company's and directors' tax returns, and whether they're included in the monthly fee. Accounting doesn't stop at accounts.

Also, there's no demo of the software that I could find, neither a video nor access to a demo account. I'd have liked to see what the software looks like.

And Crunch seem to be doing all they can to encourage sole traders earning over £25k per annum to go limited.

Yes, that will save tax. Yes, that will give the benefit of limited liability.

But it does come with its drawbacks.

For one thing, if you work from home and want to keep your address private (i.e. not have to put it on your website / e-mail signature / business cards), there's no doing that if your business is a limited company.

For another, you have to understand the concept that you and the company are two separate legal entities. Any sales the company makes is money that belongs to the company - not to you. You can't take money out of the company as freely as you can from a sole trade, which is legally the same entity as you.

So what's my verdict on Crunch? I'd have to know a bit more before saying that. And I guess they're not going to put the negative side of being a Ltdco in their marketing - but I hope they warn customers of it first...

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