Starting up a business whilst efficiently managing your accounts is a lot like being thrown in at the deep end, and if you don’t get the right help at the right time – there is a chance you’ll go under. The initial days of an organisation can be very challenging and it's often intensified by the pressure to manage your accounts. The financials can become complicated quickly, so having an accountant on board could well be just the solution you need.
Frequently, start-ups don’t think twice about recording transactions or documents. That's because they're either trying to keep the costs down and feel they can’t afford a business advisor or, they don’t know if what they’re doing will be successful in the long run. Later on they then find themselves in a panic searching for old receipts and records to put together a set of yearly accounts, either to find funding for your start-up or, to submit to HMRC so as to avoid hefty fines.
In this post we explore the answers to a common entrepreneurial question we come across, "Why do I need an accountant?" Read on to find out more and the criteria upon which to select the right firm to help you in your plans to grow and scale.
More often than not, owners tend to find themselves caught up in the everyday running of their business. It can be pressurised enough ensuring that everything is going smoothly and customers are satisfied, without having to deal with your finances.
Growing your enterprise whilst managing your accounts can result in feelings of frustration and at times, panic. Instead, let an accountant deal with the burden of the finances. After all they know what they’re doing; they’re specifically trained and qualified in this complex field. The benefits will more than justify the investment because you’ll be able to spend more time on things like new customers, keep existing customers happy or training up staff.
Very few businesses enjoy paying tax, but even fewer know about the tax reliefs available to them. Your accountant can enlighten you on tax exemptions that you didn’t even know about, saving you money that can be better spent on other things in your organisation.
Essentially you can not put a price on good, relevant and timely financial advice so in that light perhaps the question should be can you afford to not invest in an accountant? The right advisor will make a real contribution to the growth of your organisation and missing out could prove expensive.
Consider these questions:
Those are just some of the regulatory requirements that you’ll need to implement on a regular basis. It can be time consuming, stressful stuff. Worse still, get it wrong and you’re likely to face significant fines for non compliance.
Imagine, your business concept is gaining traction, your number of customers is growing, the money is starting to come in and then you’re hit with a big fine by HMRC for errors in your tax return. Best not let all that time and effort go to waste, give those tasks to someone who will always ensure they happen in a punctual and correct manner.
An accountant will be able to advise you on what records are important to keep hold of, help you prepare for your annual tax deadline and guide you in the right strategic direction.
If your understanding of accounting is limited, you may find that you’re spending substantial amounts of time managing your accounts and you may even feel like you’re losing track of who owes you money and which suppliers need to be paid. Even if you do have an understanding of accounting, you need to weigh up if it’s worth what you may be sacrificing in your business to spend time and effort dealing with the finances.
Remember, time is money and money is time. Trawling through bank statements, invoices and receipts can be a major distraction from the efficient functioning of your start-up. You could be earning more money allocating your time to the daily running of the organisation by simply hiring an accountant to do this work. If managing the finances isn’t one of your strengths, then stop wasting so much time on it and start focusing on what you’re passionate about – the success of your business.
It can be far too easy to lose direction of your goals and budget when starting out – this is where your accountant can help as an advisor. They’ll be able to give you advice on your business plan and budget. Not only that, they can also help you navigate through the maze of deductions, the requirements of VAT and PAYE and the procedures involved.
The best accountants can also provide relevant and timely information on industry developments and legal matters. This may be through regular communication with you directly, via their newsletter and blog or a combination of both. Be sure to check this out when considering which firm of advisors to select. After all, it’s important to know you’re up to date and complying with all the latest rules and changes.
In the early days you need to consider if and when it suits your needs to hire an accountant. Given all the compliance and regulatory requirements of doing businesses these days, some entrepreneurs feel more confident having a financial advisor on side from the start. It may even help you to seek the advice of an accountant at the planning stage prior to launch because a good advisor can challenge your assumptions based on their experience and assist with your financial forecasting.
Other business owners are successful at managing their accounts because they have a financial background and it’s their area of focus. Alas some don’t succeed because they can’t prioritise specific business tasks due to drowning in all the administration and regulation. If you feel overwhelmed with it all and you’re sinking, then it may be advisable to seek the help of a business advisor sooner rather than later.
Carefully weigh up both the benefits and investment required. Then assess what is right for your business.
The content of this post is up to date and relevant as at 17/10/2016.
Please be aware that information provided by this blog is subject to regular legal and regulatory change. We recommend that you do not take any information held within our website or guides (eBooks) as a definitive guide to the law on the relevant matter being discussed. We suggest your course of action should be to seek legal or professional advice where necessary rather than relying on the content supplied by the author(s) of this blog.