Running your business without an accountant is perfectly feasible and many startups or self-employed people choose to handle their accounts themselves. But, although it might seem like a smart choice for businesses that think they cannot afford or don’t need accounting services it could prove to be a costly mistake.
And if you are ambitious and looking for business growth, an accountant is invaluable..
So how do I know if I actually need an accountant or if I’m still fine on my own, you ask? Well, this is very much a decision that is based on your business situation or needs. However, there are some clear signs that can help you see if your business is in need of professional accountancy services. Let’s have a look at 7 of the most important signs:
1. You’re starting a new business and you have questions
Starting a new business is not easy, especially in the middle of a pandemic, and you may have some questions / concerns about it. This is something you may not be able to just look up online, as different things apply to different situations. Making sure that you fully understand what you’re doing and what’s best for you is key.
One of these things is choosing the best legal structure for your company. Perhaps you’re unsure of whether you should set up a limited company or work as a sole trader. An accountant can help you make this decision by explaining the differences between the two and how each will affect you. They will also give you expert advice on what’s best considering your individual situation.
Additionally, an accountant can help you set up your new business in a way that ensures a smooth ride from the get-go. They can help you create a business plan as well as advise you on what kind of accounting systems you will need. You may also need to seek financing and your accountant can help you with the application process… The list is endless and the help and advice you can get from an accountant is invaluable.
2. You know nothing about accounting and taxes
Accounting can be very complex and requires a lot of specific skills and knowledge, which is why professional accountants spend years obtaining specialised qualifications. So it comes as no surprise that you may struggle to understand certain areas of accounting and bookkeeping.
For instance, you may not understand the terms used in accounting or perhaps you know nothing about the amount of taxes you’re supposed to pay and when you’re meant to pay them. This is more than normal – as an entrepreneur, you are not expected to know and understand these things, as it’s not your job. The same way as you wouldn’t try to fly your own plane or make your own health diagnosis.
That’s exactly what accounting firms are there for – to look after the finance function for you, while letting you focus solely on running a successful business. Instead of spending time and nerves trying to understand something that is not even your job, why not trust a professional to do it for you? They don’t only make sure that your numbers are managed well and taxes are paid correctly, but also can give you advice on the best ways to manage things for your business.
3. It takes up too much of your time
Accounting can be extremely time consuming and the larger your company grows, the more there is to manage. As a business owner, you have plenty of important meetings, decisions and tasks to focus on and these are all working towards growing your business and generating profit. If you find yourself spending a significant amount of your time on accounts and, even worse, your accounting interferes and takes over other important business activities – it’s time to make some changes..
An accountant can save lots of your valuable time by taking it over from you and allowing you and your team to focus on more important things.
4. You have goals, but don’t know how to reach them
Having specific goals for your business is great and even advisable – they allow you to easier measure your progress, add structure and work towards business growth. However, sometimes business owners have great ambitions for their companies but are unsure of how exactly to reach them. This is where an accountant can offer you a lot of help.
Accountants will look at your numbers and see whether your ambitions are viable to begin with. They will then help you make a structured plan towards achieving these goals and advise you on how to move forward. All of these decisions will be made based on your individual situation, needs and wants.
5. You’ve been contacted / received visits from HMRC
Generally, when a business is run smoothly and pays / files everything on time, you don’t get HMRC knocking at your door. So, if you have been contacted by them, there must be a reason. It may be something simple and easily resolved – such as a reminder that your self-assessment needs to be done soon. However, it could also be a missed deadline that you weren’t aware of or a discrepancy found in your accounts. If that’s the case, obtaining accounting services is a smart move – With their experience and skills, professional accountants know exactly what to look for and how to resolve any issues. Having an accountant by your side will make this matter much quicker and easier.
6. Your revenue is growing, but your profit isn’t
Some business owners face the frustration of having their companies become more and more successful yet not seeing much increase in profits. More often than not, there’s a reason for it and your business just needs to make some minor changes to see improvement. For example, you may need to reduce some unnecessary expenses, improve your debtor days or give up a product that doesn’t bring enough profit.
A good accountant can help you find these reasons and identify ways to improve profitability. Again, professional accountants have lots of experience working with different businesses and developing strategies for them, which is why they are usually able to spot these things quicker and advise you on how to move forward.
7. You are selling your business
There are a number of things you need to sort out when trying to sell your business. It may seem like a simple process on paper however, in reality, it’s anything but.. If you’ve never sold or acquired a business before, it’s likely that you’ll need help making a business exit strategy and reaching the best possible sales outcomes. Have a look at the things that an accountant can help you with when selling your business:
- Valuing your business objectively;
- Organising and structuring the actual deal;
- Overseeing the tax matters that are specific to M&A (Mergers and Acquisitions);
- Evaluating the risks of selling your business;
- Helping you plan your life and finances after the sale;
Conclusion
If you find yourself relating to one or more of these signs, it’s likely that you could greatly benefit from a professional accountant’s help. The biggest concern of outsourcing accounting for most business owners is the added expense, however, in most cases they end up saving money in the long-run and start operating in a more efficient and profitable way.
Besides looking after your numbers, accountants are also vastly important for improving your business strategy and making necessary growth decisions.
Article by ASFB
