Maximising profits is one of the main goals for every company and so it’s natural that business owners tend to be very strict with the money that is going out of the business. However, some expenses are unavoidable, so the key is to manage them wisely to maximise profits.
Accountancy services are one of the business costs that the majority of companies incur. The question is, do you see them as an expense or an investment?
Expenses are a necessary evil.. We can’t avoid them and maybe view them as a grudge purchase with little value to add.
An investment, on the other hand, is about the return on your spend – it brings you benefits, whether it’s more cash, more discretionary time, or simply peace of mind that everything is as it should be.
An accountant is someone that you don’t need to run a business but is invaluable in many ways. The purpose of an accountant is to bring value beyond just day-to-day bookkeeping and annual accounts.
So, let’s have a look at what an accountant can do for your business:
Ways an accountant can help your financial health
Minimizing your expenses means boosting your profit margin – every business owner understands this and it sounds fairly simple. However, in reality, it’s anything but. If you are not in full control of your financial management, it can be incredibly difficult to understand where exactly you are spending your money and why you are not achieving your profit targets.
This is where a finance professional can add huge value to your company. Your accountant will help put you back in the driving seat of your finances and understand the numbers.
Here are the various ways they do that:
- Tax advice and planning – Taxes can be a significant outflow of cash in businesses, but there are ways to make your business more tax efficient.An accountant will ensure that you are only paying the tax that you are legally required to pay – many companies don’t realize that they may be overpaying tax.An accountant will be able to get your tax planning under control, apply for any relevant incentives or reliefs that could significantly cut your overall tax bill, and deal with any HMRC matters for you.
- Better cash flow management – In every business Cash is King. Efficiently balancing the inflows and outflows of your cash can make the difference between profitability and insolvency.An accountant can help you better understand where your money is going out to and where it’s coming in from, as well as give you expert advice on how to improve your cash flow position.
- Cost control and management – To improve your cash flow, you need to reduce your cash outflows. This can be done by cutting down on all unnecessary costs, negotiating better terms with your suppliers and debtors, and reducing your expenditure.An accountant will review your current operations and help you find the best ways to reduce your costs without harming your business.
- Forecasting and financial planning – Planning and forecasting your finances are the first steps to achieving your growth and profitability objectives. Planning sets a clear path to realize your goals by setting out strategies. Forecasting allows you to plan for the unexpected and understand any potential future risks for your business.This is where an accountant brings a lot of value – they can help you consider different scenarios, make comprehensive financial plans for the future, and have a more efficient budgeting system.
- Better management reporting and information – Financial business reports are one of the most important management tools for decision-making. They help you understand where your company currently stands and what can be done to improve your situation.Finance professionals can provide you with detailed management accounts, breakdowns of key metrics, and forecasts for your cash flow, spending, aged debt, and revenue. They will help you understand the numbers so that you can make better-informed business decisions, save money, and work toward business growth.
Other ways accountants bring value
Besides the financial aspects of the business, there are many other ways an accountant can bring value to your business. These can be easily forgotten, however, they are just as important.
- Business advisory – Whether you are a startup or a large company, there is no doubt you may need expert advice once in a while. If anything, you should be seeking professional advice whenever you have any concerns or challenges.Accountants have experience in many different areas, so they most likely have already dealt with similar situations to yours in the past, and they may be able to offer fresh thinking that you will value.
- Allowing you to focus on your business – Trying to handle your own accounting and bookkeeping can be time-consuming and can become complex. Spending your valuable time on accounting means that you have less time for other important business tasks. And you probably have plenty of those.An accountant can look after the whole finance function for your business, They can save time dealing with HMRC and deal with grant band loan applications efficiently. They can also provide you with valuable resources and information that you otherwise would have to research yourself.
- Boosting business efficiency – Accountants know how to do their job in the most efficient and smartest way possible. They will have knowledge of intelligent software that automate processes and make day-to-day bookkeeping or payroll tasks much more efficient. If you decide to use an accountancy firm to handle your finances, you will likely see an increase in your overall business efficiency.
Why should I outsource my accounting function?
Once a business decides to get an accountant, it also has to decide whether to hire an in-house team or outsource to an accountancy firm. There are pros and cons of both approaches.
Outsourced accounting services eliminate any employment costs. Hiring your own employees will incur a variety of hidden costs, such as recruitment costs, National Insurance Contributions, Pension contributions, holiday and sick pay, maternity and paternity pay, non-productive employee time, management time, dealing with payroll, etc. All of these costs add up to a significant amount, which you’ll not incur with outsourcing.
In addition, outsourcing will reduce your overheads. You’ll not incur costs for office space for employees, work equipment and computers, accounting software subscriptions and licenses, IT support, etc.
Outsourcing also eliminates the risk of fraud or theft within the company. Fraud committed by employees is one of the biggest business risks, believe it or not. It can be extremely difficult to find the responsible people until too late, and it can quickly cause severe damage to a company. Outsourcing your finance function will put into place secure controls that give you protection.
Final word
All in all, it is safe to say that accountants are an investment rather than a cost. Their main job is to bring additional value to your business as well as ensure growth and profit maximization. An accountant will not only give a return on your money but also help you overcome business challenges and realize your objectives more quickly and with focus.
Source: ASFB
