The term you know all too well but may not be particularly fond of as an entrepreneur: business accounting. At times it can be downright cringe-worthy, especially when it comes to tax time, you might start to feel like a pugilist in the third round.
Thankfully, with new technology comes new software to help make this side of running a business just a little more bearable. Cloud-based accounting and invoicing software can significantly simplify the accounting experience, making it fast and easy to enter and track expenses, enter payments on invoices, and manage your cash flow.
However, most of these programmes are not meant to replace a qualified accountant. Especially when ensuring that the credits equal the debits, and everything is up to scratch for your Self Assessment tax return, it is more than a little useful to have a professional on your side.
Is an accountant really necessary?
Even if you’re just starting out or consider your business a bit small for an accountant just yet, you may want to take some time to take into account your goals for growth and development before putting off finding an accountant until you’re more established.
A recent study by the International Federation of Accountants (IFAC) reveals a strong positive correlation between startup success and accountants hired externally. In fact, they found that startups are almost 30pc less likely to fail if they worked with an accountant from the early stages.
Finding the right accountant for your business has never been easier. With a little bit of research, you can connect with an accountant who has a relevant background with companies in your industry and who you can get along with on a personal level.
So what can an accountant do for you?
Beyond helping with tax filing, an accountant can assist in a number of other areas that can directly contribute to the growth of your business, including:
- Help you craft a professional, thorough business plan. This includes your business model and is a crucial aspect of getting a strong start with your business and set out a clear strategy. Flaws or areas overlooked in a business plan can have disastrous effects later on, so it’s worthwhile to get an accountant to at least look over the financial section.
- Help you determine the best legal structure for your business. Are you a sole trader or is a limited company a better choice for the growth of your business? And which tax scheme is the right one? An accountant will have some legal knowledge of the best choice for your business, particularly when it comes to the ramifications regarding finance and tax.
- Help you stay on top of your finances so that they don’t get out of hand. If business starts to pick up rapidly, you may find you’re compromising certain things or putting them off until later. With an accountant, you can make sure that your business finances do not become one of them.
- Help with the financial administrative tasks. This means ensuring that your documentation meets local regulations and requirements. They will take care of the paperwork and handle discussions with the tax and business authorities so that you don’t have to. Which means more than just considerably less telephone queuing for you (although, that’s quite a perk).
- Advise you on important business decisions. As your business continues to grow, having an accountant that you can rely on to help with big decisions that involve your company finances can be invaluable.
Making the most of your accountant’s knowledge could not only translate to a healthier business, it can also teach you more about managing your company’s finances. By establishing strong communication with an accountant from the beginning, you can benefit throughout the growth of your business.