Why Hire an Accountant?

Published: 19 Mar - 2019 by Ben Rendle

Accountants can help you out at various stages during your business growth. They can do much more than just your payroll and tax returns. So when should you consider hiring an accountant for your business?

Challenges for a growing small business


There are good reasons for hiring an accountant during different stages of your company's growth. From company formation to a business plan or loan application, an accountant can make your life easier at every step.

That doesn't mean you always need to employ an accountant full-time or hire one on a retainer basis. Sometimes you will only need a couple of hours of their time.

You may think you can’t afford an accountant, but look at how long it would take you to do certain tasks (such as taxes), and ask yourself, is that a good use of your time?

For example, let’s say it takes you 10 hours to do your taxes, and your time is worth £100 an hour. That’s a cost of £1000 to do your taxes yourself. And there’s always the risk you’ve made errors – especially if you’re multi-tasking like most business owners.

However, if you get an accountant to take care of time-consuming tasks like taxes, it’s quite likely the cost of the work they do will be less than you would pay yourself. You’ll not only have extra time to free you up to generate revenue, but you’ll have peace of mind that an expert is taking care of the details.

So at what other stages of your business’ life might you want to hire an accountant to help you?


You’ll need advice when you write a business plan


If you seek the advice of an accountant when you're writing your business plan, they will be able to use software to add financial projections and other reports to it. This will help you create a business plan that's realistic, professional and more likely to succeed.

Hiring a professional at an early stage will mean you get the benefit of their knowledge right from the start. That could save you time and money compared with hiring one later.


You’ll need advice about the legal structure of your company


Not all businesses have the same legal structure – there are different types that are determined by several factors. What do you choose? A limited company, limited liability partnership, do you remain a sole trader?

You should carefully consider each type before deciding which one best suits you. For example, you may do business as a sole trader, working on a self-employed basis and invoicing under your own name. If this is the case, you might be able to offset some of your living expenses against tax.

However, this also means you could be held personally liable for any business-related obligations. If your business fails to pay a supplier, defaults on a debt or loses a lawsuit, the creditor could legally come after your house or other possessions.

With a limited company structure, it's different. As the name suggests, the liability of the business is limited to the assets owned by the business, not you personally (though there may be exceptions in some circumstances).

An accountant can explain the business structures available and help you choose the one that best suits you.


You’ll need an accountant to help with the finances


Small business accounting can quickly become complex if you do it on your own. If you feel you're losing control of who owes you money and how much, an accountant can help you get back on track.

You may also want to measure key performance indicators, such as the ratio of salaries and other employee payments to total revenue. An accountant can help here by managing your payroll and producing graphs so you can see how the ratio changes over time.

If your accountant uses cloud-based accounting software, they'll be able to share your business accounts with you quickly and easily. And they can produce tables and charts that will help you understand your company's current financial situation at a glance. This will help you monitor the pulse of your business and keep track of important things like cashflow.


Are you ready to delegate? Hire an accountant


As a small business owner, no doubt one of the things you like best is that you have control. You set your own hours, design your business strategy, regulate your workload (at least to some extent) and determine your own finances. And being the master of all of these things is a liberating feeling.

But sometimes it can stop you from delegating. Business owners can feel overworked, partly due to a reluctance to allow other people to help. You might feel that no one can possibly know your business as well as you do, therefore nobody can handle any part of your business as well as you can.

Inability to delegate can mean you’re left feeling overworked and stressed. At some point you will have to let go and learn to trust other people to handle some parts of your business so that you can look after the rest.

Delegating your company's financial affairs is a good start. You need to choose the right accountant and make sure you trust them with your company's finances. Once you've handed over your company's finances to someone more experienced in accountancy than you are, you will have more time to concentrate on other aspects of your business.

Some of the most successful business owners in the world are experts at delegating work to the right people – so try to learn from them.


Applying for a business loan or overdraft? You’ll need an accountant


Banks like to know they'll get back the money they lend out, especially since the credit crunch. Lending to small businesses has dropped in most countries over recent years. This makes it even more important that you have a sound business case when you apply for a loan or overdraft.

An accountant can help improve your chances. Even the fact that you have an accountant might sway the bank in your favour, as it implies you're serious about your business. With good accounting software, your accountant can present facts and figures that back up your application for funding. They’ll also be able to answer any questions your bank might have about revenue projections and expenses.

Your accountant can also help you choose which loan to go for, and tell you whether your bank’s terms and conditions and interest rate are favourable to you.


Is your company growing? hire an accountant


Companies don't always grow at a steady rate. A new client or project can mean you need to grow your business more quickly than expected.

An accountant can help you handle this growth. They'll look after the detail (payroll, employee tax management, property tax, utility payments and so on), leaving you free to look at the bigger picture of the way your business is growing.

An accountant can also use accounting software to analyse your cashflow, stock levels and pricing. They can also provide insight into how to properly grow the business through financial analysis. They could even help determine when is the best time to introduce a new product or service offering to your range.


Accountants can help you every step of the way


As you can see, accountants can help you out during every stage of your company's development. That doesn't mean you have to hire one, but the right accountant should make life easier for you, so you can concentrate on what you love doing.

Your speciality is running your business. Leave the financial detail to an accountant. If you and your accountant use cloud-based accounting software, you'll be able to keep track of what your accountant does, and always be able to see your company's financial situation at a glance.


Got further questions?

Contact BR Accounting & Business Services Ltdfor your free no obligation meeting.


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