Accountants advice

What is an accountant?

An accountant is a qualified individual trained in bookkeeping and the analysis of finances. Part of their duties will usually include preparing annual financial reports, tax returns, payroll as well as helping with budgeting, financial planning and help with growing your business.

What do accountants do?

How much, or little, your accountant does for you is often your decision. Some business owners will only speak with their accountant once a year at the year end, while others will engage regularly, using their accountant almost as a in house Finance Director.

However, even if you only ‘use’ your accountant once a year, they’ll be keeping an eye on your books the whole year round. And with a constant finger on your business’s financial pulse, they’ll be crucial in helping you with future planning.

Why do I need an accountant?

While some business owners may attempt to handle their accounts themselves to save costs, there are several reasons why this may not be beneficial in the long run. Some of these may be practical in terms of time taken away from the business, whereas some may be the need for specialist knowledge (VAT Returns or if iXBRL means nothing to you – read on…):

5 Reasons to hire an accountant.

1. If you’re unsure about your taxes

For some, taxes can be a nightmare. Complicated forms, hefty late fines – in fact, knowing your IR35 from your R40 (and the hundreds of other codes) is near enough impossible, unless you’re an expert.

Hiring an accountant to deal with your taxes can be a simple way to make sure you avoid any late payment fines, while they could also save you money in terms of how much tax you actually need to pay.

2. If you’re worried about staying legal

Accountants can also help when it comes to keeping your business on the right side of the law.

The self-employed are regulated by a lot of different legislation and understanding it all could be tricky. For example, some business owners fail to take out employers’ liability insurance for their employees, despite this being the law.

They can also help when it comes to deciding which legal structure is right for your business. If you’re currently a sole trader, they may inform you that you’d be wise to switch to a limited company set-up. Aside from moving liability away from your personal finances, this can sometimes also help cut costs and increase your profitability.

3. If you’re struggling for time

Running a full-time business takes time. And lots of it.

Outside of your usual business hours you might be ordering stock, striking up new business or taking care of your website.

On top of this, it’s important that your work-life balance works for you, and spending time relaxing with family and friends should be part of any business owner’s schedule.

Sorting your taxes and organising your finances are just extra tasks on that never-ending to-do list, and if your time is stretched as it is, hiring an accountant to deal with this side of your business could be worthwhile.

4. If you want help with financial planning

Unlike bookkeepers who will generally take care of invoices, payroll and the like, an accountant should help their client plan for the future, by understanding their finances and the future landscape.

Sound financial planning and budgeting is crucial when it comes to the growth of your business and can help with understanding things like when to hire an employee, how much work you can manage, and whether to adjust your rates.

Financial planning is especially important if you’re self-employed, as getting this wrong can impact your professional and personal life.

5. In a nutshell!

Hiring an accountant offers invaluable expertise and peace of mind for businesses. With their specialised knowledge in financial matters, accountants ensure accurate bookkeeping, tax compliance, and strategic financial planning. They save time by managing complex financial tasks, allowing business owners to focus on growth and operations. Moreover, accountants can identify opportunities for tax savings and provide valuable insights into the company’s financial health, ultimately contributing to informed decision-making and long-term success. In essence, investing in an accountant is an investment in the financial stability and growth of the business.