Hate accounts? Why Darren Fell from Crunch is determined to help
For most freelancers and small businesses, doing your accounts is an expensive annual headache. However, one company is determined to take the drudgery (and cost) out of it.
Crunch Accounting have streamlined and simplified the accountancy process with their own unique online software, while offering a high level of customer service – all for just £64.50 a month (plus VAT). We asked co-founder Darren Fell how and why he did it.
What gave you the idea to start Crunch?
In 2007, an accountant called Steve Crouch approached me with an idea for a simple piece of accounting software. I really liked the idea but thought we could do more with it.
Over the years, I’d had some bad experiences with accountants. I found that when I first joined a new accountancy firm I’d be met by a very pleasant and knowledgeable person who quoted an affordable price. But six months on, they’d never call me back and my bill would always come in higher than I expected.
I noticed that many traditional high street accountancy firms often carry on selling their services to new customers, and forget to put resources into their businesses to support the ones they have.
I wanted to create a completely new model that combined time and money-saving accountancy software, with the support and expertise of a traditional accountant. So together Steve and I started developing what is now Crunch.
What was your initial vision for the business, and has it changed?
My original vision was to develop a software system that was able to automate end of year accounts, and combine it with a person at the end of the phone to answer questions and sort out any problems with HMRC.
That vision has never changed.
How does Crunch work?
Just like a traditional, face-to-face accountant, we look after all your business accounting. When you join us, an account manager will call you and take you through the joining process. They’ll set up everything with HMRC and be your main point of contact.
Any time you have a question or problem you can get in touch, or make an appointment to speak to an accountant on your ‘pod’ (the team of people who look after your account).
However, unlike many traditional accountants, Crunch takes care of 100% of your business accountancy needs, and deals with HMRC on your behalf for one fixed, flat price. You can also see throughout the year exactly how much you owe HMRC so you can put enough aside for your annual bill, thanks to our easy-to-use software that you update every month.
And just like a face-to-face accountant, we’ll make sure you’re as tax-efficient as possible, and let you know how much you can take out in dividends. (In fact, many high street accountants aren’t tax specialists, and often when new customers join us we need to correct past errors.)
You say you take care of ‘all’ accountancy needs. What’s included in your service?
In addition to use of our user-friendly software, and unlimited accountancy support, we take care of your:
- Year end accounts.
- VAT registration and returns.
- RTI-compliant payroll service.
- PAYE scheme registration.
- Corporation Tax return.
- Companies House annual return.
We do all this for just £64.50 plus VAT a month (disbursements like the Companies House charge of £13 aren’t included). We also don’t tie you into a contract, so if you wish, you can leave at any time with no exit fee.
How can you afford to charge such low prices?
Because we’ve invested in creating our own, unique system that works, and creates efficiencies that allow us to pass savings onto customers.
We use in-house software to make our processes more efficient, and have learned how to divide our service up between teams (or ‘pods’). We’ve even streamlined the way we handle VAT.
We invested everything into our approach. It cost us £1.1 million to create the original system, and we’re putting in almost £1 million a year into improving technology. But it’s been a wise investment as it’s allowed us to completely change the approach to accountancy, and offer small businesses and freelancers a brilliant, comprehensive service at a low price.
What kind of business or freelancer are you perfect for?
Crunch is perfect for service-based freelancers, contractors, consultants and locums – basically anyone selling their skills or time.
At the moment we only work with limited companies as they’re the most tax-efficient set up. Cloud accountancy also only really works for companies with a maximum of four directors and 10 employees. After that you’re better off with a face-to-face accountant.
If a Crunch customer has a question, how quickly can they get an answer?
We normally aim to answer any question within two to four hours. However if your query is particularly complicated it may take a little longer. (We use Zendesk to raise questions so you can see instantly where your request is in the process of getting answered.)
Most people prefer to contact us by email, but you can also phone us and arrange calls with an accountant by video. If you want help with future tax planning, goals and targets etc, you can also book a one-to-one video call with a senior accountant on your pod for an additional charge.
Why should someone choose you over a ‘real life’ accountant?
With traditional accountants, you often spend at least one day a year in a panic trying to get all your receipts (which you meant to keep on top of over the past 12 months but didn’t) together and find missing bank statements. Then you traipse along to your accountant’s office to sign forms and find out how much you owe (which more often than not is a bit of a shock…).
Crunch has been designed to take away all the drudgery of accountancy. Throughout the year you easily keep on top of your bookkeeping with our user-friendly software. You can see exactly what your corporation tax bill is currently looking like, and with one flat monthly fee covering everything, you don’t get any nasty surprise expenses from us.
There’s no need to visit us for your annual accounts pilgrimage, and if you do have a burning question, you can email, call or video chat to us. Our software is also regularly updated with any new legislation or tax laws – so you can be confident that you’re taking advantage of every possible legal tax break (rather than hope that your high street accountant has their finger on the pulse).
We’re also a lot cheaper than traditional accountants. Most will charge you around £1,500-£1,800 for the year, while our annual fee is less than £800 before VAT.
Where do you see Crunch in five years time?
I want Crunch to be genuinely helping tens of thousands of small businesses, freelancers, contractors and locum doctors. Our aim is also to be in the top 100 of UK accountancy firms, and number one for micro businesses.
I’d also love ‘Crunch’ to become an everyday term for freelancers and small businesses – to hear people say ‘I’m going to Crunch my accounts’!
What has been Crunch’s biggest success to date?
The realisation that we are the fastest growing accounts firm in the UK. We’ve worked really hard to put everything together, and when the report came back last year, it suddenly dawned on me that we’d made major inroads on changing the world of accountancy. Seeing evidence of that in black and white felt great.
And your biggest challenge?
Our biggest challenge was finding a way to successfully combine expert humans and software – it was a massive undertaking. No one else has ever managed it before like this, but we did.
Who inspires you as an entrepreneur?
I’m just as inspired by smaller entrepreneurs with brilliant ideas and determination to make them work, as I am the Richard Bransons of this world.
If I had to pick one person though, it would be our Chairman, Michael Van Swaaij. He’s invested personally in us and is a brilliant mentor. He’s very unassuming – no ego just a very clever mind. He’s also got a great eye for business. In the 90s, when he was general manager for AOL in the UK, he saw what Ebay were doing in the US and got in touch. They were a tiny company then, but he liked what they were doing and offered to take them into Europe – and the rest is history!
What advice do you have for other budding entrepreneurs?
Don’t get caught up in waiting for the most amazing business idea in the world to come along. If you have a gut feeling or an idea, just go for it and tell as many people as possible what you’re doing. Often the real idea will come out of your original one in the process of trying to make it work.
Also, don’t think you need to keep your idea to yourself – surround yourself with brilliant people and listen to their advice. I work with lots of local businesses, and those that aren’t open or willing to listen are the ones who fail.
Finally, while we all like success, few businesses achieve it without some failure along the way. Often the line to success is zig-zagged with ups and downs – and the downs are just as important as the ups. They’re often when you learn important lessons and retune your business so it works better.
In short, go for it, and don’t be afraid to cock up!