Accountants can provide a range of services that help small businesses and other individuals that are required to report their financial information. While accountants can help save tax and provide insights to boost growth; are they a necessity in modern times?
Small Businesses
If you’re a small business or thinking of starting a business, then there may be a number of reasons why appointing an accountant would be a good idea despite the additional cost.
The cost of an accountant may seem unaffordable especially when first starting out. One thing to consider however is whether the time spent completing task that could otherwise be done by an accountant is a good use of your time.
Often the cost of an accountant is less than the time cost of doing the task yourself. This frees up extra time for you to generate income whilst giving you peace of mind that a competent expert is completing your accounts or tax return.
Business Plans & Loans
It is always a good idea to create a business plan when starting a new business. This helps you understand and overcome any potential weaknesses and issues that may arise during the early stages.
An accountant can help produce financial projections and provide advice at this early stage which can be crucial to identifying omissions or even matters that you may not have considered. This is particularly important if the business plan is to be used to gain finance.
Banks need to assurance that any money lent out will be repaid. An accountant can help improve the likelihood of a loan being granted. Having an accountant provides banks with reassurance that you have taken steps to seek relevant guidance from a professional regarding your finances. Most accountants have extensive experience dealing with banks and can normally second guess questions that they will ask.
Legal Structures
Another consideration is the legal structure of your new business. Not all business are companies and not all companies are businesses. If you’re starting a new business you can operate as a limited company, a limited liability partnership, a sole trader or a partnership.
Choosing the right business structure can be complicated with a number of factors to consider. From potential tax savings to the limitation of personal liability. An accountant can help you decide the best structure for your circumstances and start you off on the right footing.
Dealing with the Taxman
It’s not just businesses that need to file tax returns. Below are some examples where a tax return filing may be required:
If you’re in receipt of rental income
If you’re employed and receive a gross salary of over £100k
If you’re employed receiving a gross salary of over £50k and either you or your partner are in receipt of child benefit
Claiming employment expenses over £2.5k
Trying to complete a tax return without any prior knowledge or experience can be a daunting task for many. Trying to navigate through the various tax rules and requirements. This is why many small business and individuals trust an accountant to take care of their statutory requirements.
An accountant can also help with more than just tax returns, they can help you stay compliant with record keeping requirements, keep your details updated, provide advice and guidance with regards to VAT and Payroll.
A good accountant can also help save you money with their knowledge of tax laws and rules to make sure you do not pay more tax than you need to.
Limited Companies
If you decide to operate a limited company there is an extra layer of compliance that is required and an extra body to report to in Companies House.
You will need to ensure that you:
Prepare statutory accounts annually
Maintain registers of directors, shareholders and persons of significant control
Prepare and file an annual confirmation statement as well as other forms
Record and hold documentation of minutes, resolutions and other changes
Without an accountant dealing with these additional requirements can be difficult.
Management Information
Most accountants these days have embraced technology to help streamline processes and add value to you and your business.
This is usually done by not just completing the statutory requirements but by providing useful information on regular basis in the form of management reporting. Where you may not have the time to regularly crunch the numbers and see how your business is doing or how a particular product or service is doing or how much your spending on particular costs; an accountant can provide this information for you.
Using cloud based software and automation techniques most information can be presented in short turn around times and sometimes instantly. Available to you at anytime and anywhere.
Growth and Progression
We have established that an accountant can help you in a number of ways from getting a of a business started to helping keeping things running smoothly. This doesn’t mean that an accountant is a necessity for everyone, but a good accountant can take away a lot of the stress so you can do what you do best; running your business.
