How working too hard can come at a cost if you're an SME

Money can buy things that make you happy. But when you run your own business it is tempting to sacrifice family and social time to make the money whilst it’s there. But what good is money if you are so overworked you don’t have time to spend it on the things that make you happy, asks AAT member in practice Psyche Coderre MAAT

Throughout time, great thinkers from Jesus Christ to Karl Marx to John Lennon have warned of the dangers of materialism. Often such philosophising has been done from ironically comfortable surroundings. But perhaps it takes piles of money to know for certain whether money can buy you happiness.

Lack of money can lead to stress

Certainly, the reverse is true. Lack of money leads to stresses and worries that interfere with a person’s enjoyment of life. Money can’t buy you love, but poverty can kill relationships. Recently, advice on how to get by on a meagre income has come from unexpected quarters.

Work and Pensions Secretary, Iain Duncan Smith, reckons he could live on £53 a week in benefits. Millionaire celebrity chef Jamie Oliver says low incomes don’t preclude healthy cooking, and McDonald’s in the US issued a sample budget to its minimum-wage workers that inexplicably included $100 per month for savings. (Its key to making ends meet? Get a second full-time job!).

Having spent a few lean years fretting about whether to pay the water bill or eat that week, I can personally attest that, yes, a certain level of money is necessary to buy your way out of misery. Where exactly that minimal level of financial security lies is a matter of debate. But it seems safe to say that most people working in accountancy are probably within the financial comfort zone.

Money does not bring happiness

The thing about money is that it, in itself, does not bring happiness. While it may be comforting to have a healthy bank balance, money really only brings pleasure when it’s exchanged for something else: a holiday; dinner with friends; a designer handbag; a high-performance car.

Not all of life’s joys come with a price tag, but many do. The downside to capitalism is that it depends on people continuing to want more. Borrowing and consumption – particularly of non-necessary items – stimulates the economy.

Advertising constantly tells us that our standard of living is not enough; we must constantly purchase more. Only through greater spending, and therefore greater earning, can we buy our way to a happier life.

As accountants, we have a unique window into other people’s financial situations. We see personal bank statements, mortgage balances, tax bills and payslips. The clientele we work with have a broad range of bottom lines. On one end of the spectrum is the government auditor who sees figures so large a discrepancy of fewer than seven figures is viewed as almost immaterial. On the other end is the member in practice whose clients’ self-employed earnings barely exceed the personal allowance limit.

It must be challenging for those accountants who work with high-net-worth clients, whose incomes are many times higher than theirs will ever be. Perhaps working with these types of figures spurs greater temptation to engage in the fraudulent practices that every so often taint the integrity of our profession.

Fortunately, only a tiny fraction of accountants succumb to illegal activities to fund lifestyles beyond their means. But all of us, particularly those in practice, face smaller conflicts between the pursuit of money and the pursuit of happiness.

Will a recently qualified AAT member choose to pursue a career with a big firm, a career that entails long hours but high financial rewards? Or will they instead choose to go into practice, setting their own hours but potentially limiting their income?

Balancing client work with your social life

Fielding a new client inquiry means weighing the additional income the client will bring in against how much time must be spent on them. When your workload is already at 35 or 40 hours a week, it may make more sense to decline the additional work.

More money is always attractive, but if you have to sacrifice family and social time to complete the work, you have effectively shunted aside the pursuit of happiness in favour of the pursuit of money. And what good is money if you are so overworked you don’t have time to spend it on the things that make you happy, or so stressed your health suffers?

To quote yet another cliché, time is money. True happiness can only be achieved with a good balance of both.

Psyche has a degree in political science from the University of North Carolina and worked as a journalist before moving to the UK. In 2002 she moved to London and began work as a housing finance officer. She set up her own business, Death and Taxes, in 2008 – just two months after completing the AAT Accounting Qualification.

Psyche Coderre MAAT, is the owner of London-based Accountancy firm Death and Taxes.