How could an accountant help your business?
Every good business will have an excellent entrepreneur; besides, there will be an accountant. Implementing an accounting system helps the company start completely controlling its finances, such as minimizing tax payments and keeping overheads to the minimum. People who run a successful business may not have the time to do the accounts or might not have enough knowledge about it.
If the business is small, it will be safe to outsource your work to do the accounts, but when it grows, you will need the help of an in-house accounting specialist; if not, you can run into serious problems. When a business hires a good accountant can be helpful in many ways, including saving money, reducing risk, complying with regulations, and helping in growth and finding funds. The other vital help when an entrepreneur wants to decide about the business needs the benefit of the accountant as it involves many financial decisions.
What is the job of an accountant in a business?
An accountant could be vital in the keyways that need in a business.
- Paying the right amount of tax
- Saving tax
- Improving cash flow
- Setting up your business
- Reducing your workload
- Bookkeeping and financial reporting
- Regulation
- Funding for growth
- Growth management
- Audits
- Buying or selling a business
- Business advice
1. Paying the right amount of tax
You don’t want to pay more tax than necessary, but underpaying will get you into trouble with HMRC. As a result, you may err on caution regarding your business tax return. An accountant can calculate your expenses and allowances with much more confidence and so should be able to find significant savings – while avoiding those costly mistakes.
2. Saving tax
An accountant keeps up to speed with tax law, so he knows how you can legally reduce your tax bill. They can identify legitimate tax-efficient strategies such as using government incentives, allowances, expenses, offsetting losses, or changing the way you draw income from your business.
3. Improving cash flow
Managing cash flow is a vital part of a business that start-ups often overlook. A company can run into trouble quickly if it does not have ready cash to spend, no matter how profitable it is on paper. A good accountant will ensure that your cash flow is strong enough to guard you against risks while increasing confidence among your investors and stakeholders.
Conversely, sometimes you as the director may need to take extra funds from your business. You can do this in the form of a director’s loan – however, these need handling with great care, so expert accounting here is critical.
4. Setting up your business
Many business ventures fail because they do not test the figures and forecasts. When you draw up your business plan, an accountant can help you put some solid foundations. They can offer an expert second opinion unclouded by emotional bias and should also be able to provide constructive input into critical areas such as your business model. A business plan signed off by your accountant is ready to roll – and will be more attractive to investors too.
An accountant can also advise you on the best legal structure for your business – sole trader, limited company, etc. All have different financial implications, and some will be more suitable for you than others.
5. Reducing your workload
Once your business takes off, you’ll need all your time to run day-to-day operations rather than spending time with the finances. Similarly, as the business finances become more complex, you’ll almost certainly need a specialist to take charge of them.
6. Bookkeeping and financial reporting
Bookkeeping is a fundamental part of managing your business’s finances, and financial reporting to HMRC is a legal requirement. A good accountant can provide both as part of a complete services package.
7. Regulation
Larger businesses are subject to more government regulation. Compliance with these requirements can take up a considerable amount of your time, and mistakes are both accessible and potentially very damaging. Once again, an accountant can take this burden off your hands.
8. Funding for growth
At some point, most businesses will need additional funding to grow. Securing finance from a bank or other source is a significant bridge to cross – lenders and investors want to know they’ll get a return on their money. Your accountant will prove vital in presenting a solid financial case to the relevant stakeholders.
9. Growth management
Sudden growth that you haven’t planned for can be as problematic as too-slow growth, leading to cash flow, tax, employees, or office space difficulties. An unmanaged growth spurt can even knock you backward. A good accountant can help you react quickly and effectively to unexpected growth and turn it into what it should be: an advantage.
10. Audits
Businesses over a specific size must undergo a statutory audit – in which case an accountant is a must-have. However, a voluntary, internal audit can be an excellent way to keep your business goals on the course, even for a smaller company. This kind of audit reassures you that everything is ticking over smoothly and is also an excellent way to prepare you for a statutory audit.
11. Buying or selling a business
Mergers and acquisitions (M&A) can be the quickest way to grow your business or enter a new market. If you’re thinking of buying up a competitor or complementary business, an accountant should be your first port of call. They’ll assess the practicalities and investigate the target company’s accounts to ensure everything is satisfactory.
12. Business advice
People forget that many accountants also serve as business advisers. They carry a wealth of knowledge that comes from working with clients from all walks of business, and an experienced accountant will have seen most of the problems and challenges you may encounter. As a result, an accountant can provide an unbiased sounding board for your ideas, warn you of potential risks and alert you to opportunities.
Remember that every business is different, and different accountants will have their specialism and distinctive strengths. When finding an accountant, talk through your needs and vision for your business to ensure you engage the best one for you.