Do I need an accountant?
Whether you are just starting out in business or are a seasoned business owner, you may wonder if you really need an accountant. A lot of accounting software can produce a profit and loss account so you might ask yourself if you can save money on the accountancy fee and do it yourself. Simple answer is that you could, but here are the top 5 reasons you might want to think again before you ditch your accountant and go it alone.
Taxes are complicated
You’ve got a profit and loss account from your software so you can just use those figures to complete your tax return, right? Wrong! Did you know that not all business expenses are allowable for tax? Do you know how to deal with capital expenditure for your tax return? What about whether you need to register for VAT and the VAT rules? Do you hire subcontractors and need to apply CIS tax deductions? Do you need to operate a payroll and do you know payroll legislation? These are just some of the things you might need to consider and deal with when running your business. If you get your taxes wrong, then HMRC will demand any outstanding tax and are also likely to impose penalties and interest. HMRC do not accept ignorance as an excuse.
Accountants save you time
As a business owner you undertake many different roles. There can be so much that you need to take care of that it can be a challenge to find time for your finances. Often financial paperwork and record keeping is left to the last minute and done in a rush to meet a deadline, which can lead to costly mistakes.
Your time is best spent working ON your business not working IN your business. Ask yourself how long it takes you to do your bookkeeping and finances and then ask how much you could make if you used the same amount of time to generate business revenue. It’s quite likely that you could make more money with that time than it would cost to hire an accountant to take care of your finances. Plus, you would have the reassurance of knowing an expert is taking care of the details for you.
Accountants make life easier
You didn’t go into business to keep records and fill out forms. Accountants can help take away some of your business stress by taking care of your financial paperwork and records. Accountants are there to do more than just provide year end accounts and complete tax returns. Here are just some of the additional ways accountants can help make your life easier.
Help manage your financial deadlines such as VAT, corporation tax, year end accounts and self-assessment.
Provide or assist with bookkeeping, ranging from fully taking over your bookkeeping to checking your records for your VAT return.
Process and manage the operation of your payroll, so that employees’ taxes are correct.
Advise and assist with your accounting software.
Keep your company’s status updated at Companies House and deal with your company secretarial requirements.
Produce regular or one-off management accounts so that you have an up-to-date picture of the financial health of your business.
4. Raising business finance
As your business grows you may need to apply for business finance. Banks often require up to date management accounts and a business plan or cash flow forecast before they will provide finance. Once you have finance, it may be a requirement that such information is updated on a regular basis.
If you already have an accountant, then they will have most of the knowledge about your business that will be needed to provide the information the lenders require. They will know your business and will be able to provide guidance during what can be a tricky time.
Accountants can save you money
Yes, it costs money to hire an accountant, but have you thought about the money you can make from using an accountant? A good accountant can make sure that you are claiming all the tax reliefs available to ensure that your tax bill is as low as it can be. They will also look at your business and can help identify areas that could be costing you money.
Small business accounting can easily get out of hand, and it can be easy to feel like you have lost control over who owes you money and how much. Accountants can help you stay on track to ensure your business stays profitable.
So, are you convinced that using an accountant can be a worthwhile investment? Financial management is crucial to the success of any business and without it most businesses are destined to fail. A recent survey showed 89% of small businesses say their success was largely aided by the assistance of an accountant. Your specialty is running your business; leave the financial details to us!