Updated: Jul 14, 2020
Would you believe around eighty percent of businesses fail within the first 18 months. One of the main reasons is lack of financial management and getting a grip on cash flow. Many of these businesses would have more chance of surviving and indeed thriving if they access to an expert, trusted accountant.
Hiring an accountant to look after your business finances should be seen as adding value, saving you money and not a cost. I wouldn’t have a go at plumbing, or cut my own hair, so trying to ‘DIY’ such a fundamental aspect could make a big difference to the financial health of your small business.
Here are just a few reasons why you should get an accountant for your business.
1. Ensure you get all deductions
A professional and qualified accountant will advise on the potential deductions you can make throughout the year, while also helping you to make more strategic plans to ensure maximum year-end deductions. Your accountant should look at your business as a whole to maximise your profit and minimise your costs. Otherwise, how do you know that you are claiming for everything you are entitled to? Tax deadlines, limits and amounts due have an annoying habit of changing on a regular basis. Overlooking any critical changes and you could end up underestimating your next tax bill.
Using an accountant guarantees that deadlines are met and that you’ll be paying the correct proportion of tax at the right time and to the right people.
2. Save you time and hassle
The majority of people start businesses doing what they love and for most this enthusiasm generally doesn’t extend to spending hours on paper piles and paying taxes.
Many small business owners assume that hiring an accountant will cost too much money. At any stage of your business, an expert accountant is essential. The worry over huge paper piles and tax deadlines keeps many a small business owner awake at night. The time you take to try to crunch the numbers yourself needs to be balanced against the amount of time you could be spending actually earning money, growing your business, maximising your profit and ensuring you get all your deductions. You should be able to access your financial information 24/7 via a platform such as XERO and not just at year end to be totally business savvy.
Your accountant can help you focus your business efforts on the really important (money making) stuff, whilst they take care of the other important (tax paying) stuff.
3. Help You Avoid An Audit
HMRC audit a proportion of businesses each year. Some are selected randomly, but some are flagged due to discrepancies. Your accountant will ensure that your records are spot on and avoid being audited due to discrepancies. instead see your accountant as your partner who keeps you on the right track throughout the year.
4. Make real-time decisions
Having an accountant as your financial advisor to help you with budgeting and monitoring cash flow on a steady and regular basis will allow you to navigate any hurdles in real time.
A combination of expert accountant and online accountancy software forms a collaborative approach with your accountant. This allows you to make decisions together based on the latest data in real time, not just at year end.
It might be that being a sole trader isn’t very financially efficient any more and that you’d be better off running as a Limited Company or that perhaps you need to be VAT registered. Without an accountant you will do what you’ve always done and get what you always got.
5. Plan for the future
As a business owner, you are most often preoccupied with the day-to-day operations of running your business. However, an accountant can take a step back and objectively look at the big picture to find the best way to support the growth of your business.
Accountants aren’t there just to help with finances; their support can improve your whole business. As your business grows, they’ll be able to run you through the various options available and point you in the right direction if you decide to change the structure of your business. At some point, most businesses will need an investment. Whether it comes in the form of a bank loan, angels or investors, you’ll need a solid plan detailing your both your forecasts and your accounts.
These are just a few reasons why your accountant is your trusted business partner, an ear to bend and an expert to hand hold you through key decisions. Not only will an accountant keep your accounts in order, you’ll also have the added assurance that you won’t be penalised for late payments. Plus, you’ll get to January feeling rather smug about having your tax return sorted.
Get in touch for a no obligation chat if you think we might be a great match for your business.
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