How an accountant can help your small business
Posted on 20th April 2022
As your business grows and you become busier, wearing the financial director’s hat as well as all the others you must wear becomes harder.
As you have built your small business you will have learnt a lot about your industry sector, your customers, and the products or services they need. However, the latest rules and regulations about taxes and business finances change regularly and it can be challenging to keep up to date. As well as making sure your ongoing finances and tax are properly managed, your accountant can help you run your business in many other ways.
Your accountant is a business partner rather than a supplier
Your accountant is – or should be – a trusted advisor who will spend time learning about how your business works. For example, during the pandemic, many accountants helped their clients to understand what help was available and apply for funding support.
Importantly, your accountants can also help you avoid costly mistakes. The top financial challenge for many small business owners is unforeseen expenses, followed by problems caused by mixing business and personal finances, late invoice payments, and poor tax planning.
The amount of money you save by avoiding these problems and the bank charges and fines that might come with them will probably be more than your accountant’s fees. You’ll also be better prepared to handle any financial surprises that do come along.
Giving you back valuable time
Keeping up to date with your tax information and bookkeeping are the day to day accountancy services that you will receive. Because your accountant carries out these activities every day they are fast and efficient. Tasks that might take you hours to complete will be done regularly and promptly allowing you to use your time to meet new customers and plan for the future.
Your accountant can also provide advice that will help you improve profitability and grow your business. This might include:
the best structure for your business – there are pros and cons for being a sole trader, working in partnership or setting up a limited company. Your accountant can explain the implications for taxes, administration and your personal liability and help you decide what’s best for you.
business systems and processes – many of us rely on software and apps in our everyday lives and your business is no different. There are many different types of technology that can improve your business systems and streamline your processes, saving you time and improving the accuracy of your information. Your accountant can advise you about the best accountancy tools for your business.
budgeting, forecasting and cash flow – having good business processes will allow you to monitor your cashflow effectively. Keeping up to date means you can make adjustments when you need to before you run out of cash in the bank or credit. It also means that you can step back from day to day financial management and rely on exception reports instead.
payroll – dealing with the payroll for your employees can be complex and time-consuming so this is another area where your accountant can help. Mistakes can be costly and could damage the reputation of your business.
tax planning – there are many ways to legally reduce your tax obligations, but mistakes can lead to fines and could give rise to an HMRC investigation. For example, by reviewing your cash flow and projecting your income you can postpone or bring forward investments in equipment and materials to help reduce your tax liabilities.
troubleshooting – your accountant will be very familiar with your normal patterns of business so they will quickly notice anything out of the ordinary. They can flag up unusual transactions and discrepancies that could be the early signs of bad practices or even fraud.
At LEOBS we aim to become part of your business, helping you with the day to day details and the bigger issues. Please get in touch if you would like to know more.
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