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How an accountant can help your business
Read time: 7 mins Added date: 26/07/2024
If you’re thinking of starting your own business or have one that’s growing, it can be tempting to do everything yourself in a bid to keep costs down. However, many small business owners soon realise that keeping on top of their finances and the regulations around PAYE, corporation tax and VAT can be time consuming and a distraction from the day-to-day.
Hiring an accountant can feel like a big step financially and in terms of trust. However, the benefits of working with a small business accountant might give you peace of mind that your accounts and taxes are being prepared correctly from the start.
When to hire an accountant
The first thing to think about is the best time to hire an accountant. If you’re in the planning stages of your small business, for example, an accountant can advise you on the right legal structure e.g. sole trader, limited company or limited liability partnership.
They could also help you prepare a business plan and financial forecasts, which are essential if you need to apply for funding or lending to get your idea off the ground.
You may have sought advice on the above on a one-off basis and decided to wait until your business was in profit before hiring an accountant on a retained basis. When your small business starts to become liable for tax, it’s critical to ensure things are done in a legally compliant way.
Delegating your business finances can prevent you from making some of the most common small business mistakes, including:
- Not setting aside enough money for tax
- Being unsure of the most tax-efficient way to take money from the business
- A lack of clarity on tax-deductible expenses.
It’s also a good idea to delegate to prevent becoming overwhelmed. If you manage employees, suppliers, customers, stock levels and more, you won’t have much time or headspace to ensure your accounts are accurate and up-to-date.
What are the main benefits of working with an accountant?
It’s easy to fall into the trap of only seeing an accountant as a cost when you’re running your own business and finances are tight. However, the benefits might outweigh the monthly investment. Here are some ways working with an accountant can make a difference to your business.
- Free up your time – if you’ve got no previous accounting experience, it might be efficient to hand your business finances over to an expert. They’ll already have the knowledge and experience you need to get things right first time rather than you trying to learn everything yourself from scratch.
- Expert advice as you grow – your accountant should be a trusted partner who can keep you on the right track as your business grows. For example, when hiring your first employee, reaching the VAT threshold, paying corporation tax and navigating cash flow challenges.
- Save you money – hiring an accountant can be financially prudent regarding the amount of tax you pay. There are many ways to make use of allowances and permitted business expenses to lower the amount of tax owed legitimately. Without their expertise and advice, you could end up paying more than you need to.
- Peace of mind – having a professional accountant to deal with your business finances gives you one less thing to worry about. You can also authorise them to liaise with HMRC on your behalf, so you can focus on running your business knowing everything is in safe hands.
What else can an accountant help with?
Depending on your business type and budget, you may want your accountant to do more than simply prepare and submit your annual corporation and personal tax returns. While the list below isn’t exhaustive, these areas will give you a glimpse into the kinds of things your accountant might be able to help with.
- Business plans – whether you’re planning to start a new business or taking your current one in a slightly different direction, a well-thought-out business plan can act as a valuable and robust guide to keep you on the right path. An experienced accountant will likely include things you wouldn’t have otherwise considered.
- Financial forecasts – running a small business for the first time can be challenging. It’s easy to get caught up in the day-to-day and take one eye off the bigger picture. Having your accountant prepare detailed financial forecasts will give you insight into where your business is going and help you measure progress against firm targets.
- Processing payroll – when your business has employees, having an accountant to ensure all payroll matters are dealt with on time and accurately will be a huge weight off your mind. They can help with practical things like issuing payslips and dealing with HMRC on your behalf.
- Buying and selling a business – not every new business owner starts from scratch. For example, you may have the opportunity to buy an existing business and need an expert to look at its financial health. Having an accountant can also be beneficial if you ever want to sell your business in the future and a prospective buyer wants to review your accounts and assets.
Where can I find an accountant?
You can find a qualified accountant for your business in several places. Before you approach any to see if they’re a good fit, it’s worthwhile thinking about the following points:
- Relevant expertise – do they already have clients in your sector? Are they used to working with small businesses of your size?
- Business size – factoring in the size of the accountancy firm you choose is also important. Are they a one-person business with many clients or are they well enough resourced to complete your tasks quickly and be on hand to answer any questions?
- Meeting in person – while accountants can do their job virtually, you may want an initial face-to-face meeting to gauge if they’re a good fit to hand over your business finances to.
When finding an accountant, it pays to have a wish list of your requirements before starting your search. You can obviously search online, but here are a few other suggestions:
- Ask other business owners for recommendations – this could be a friend, family member or business contact.
- Go to local networking groups – you’re likely to find accountants when you attend small business networking events.
- Chambers of Commerce – when you join your local organisation, they’ll have a member directory you can use to search for nearby accountants.
How Business Finance Assistant can support you
Our Business Finance Assistant online accounting software helps you manage your sales, invoices and expenses, keep on top of your cash flow and submit VAT returns to HMRC.
Another useful feature is that it allows you to give access to your accountant so they can:
- See up-to-date financials for your business
- Help prepare accurate cash flow forecasts
- View your profit or loss at a glance
- Submit your self-assessment and corporation tax returns in the future to comply with HMRC’s Making Tax Digital requirement.
Having everything stored securely in one piece of accounting software will save you and your accountant time and ensure you’re both on the same page when discussing your business finances.
You can also connect your bank accounts to the Business Finance Assistant so you don’t need to manually add things like received payments.
The more organised and efficient you can be, the quicker and easier it will be for your accountant to do what they need to.