Hiring an accountant can provide other vital services for your growing business aside from handling payroll and tax returns. So when do you know that you need a professional to take care of your finances?
To meet the financial challenges of your company
At every level of your company’s growth, accountants can offer their services and insight. They can help you with writing business plans or financial advice regarding the company’s formation, loan application, and even tax investigation. By hiring their services, you make your life easier when confronted with financial issues.
Your company doesn’t need to employ them full-time or on a retainer basis. Sometimes a few hours of service on a particular issue are adequate.
As a small business owner, your first concern is justifying the cost of hiring an accountant. However, if it’s taking you so long to complete specific financial tasks such as tax computation, perhaps hiring an accountant can finish the job quicker. Since your time is precious, it’s probably cheaper allowing someone doing your taxes. This helps you concentrate both your time and effort running the business.
For example, it took you a day to finish your tax computation and filing, and as a result, you lose £1,000 in potential sales. Meanwhile, an accountant can complete the same task in an hour, and it will only cost you £100. You also have to consider the risk of you committing errors. There is always such possibility especially since you’re multi-tasking to keep the business running.
However, by hiring an accountant to perform time-consuming tasks, you’ll likely accomplish more such as making sales. This will offset the hiring cost of a professional. So an accountant can provide you with:
- More time to generate revenue
- Peace of mind since an expert is handling your financial tasks
So what other ways can accountants make your life easier?
To obtain help for your business plans
When writing a business plan, always consider the input of an accountant. They can help with your financial projection and reports using tools and software. This will also ensure that you’ll have a business plan that’s:
- Professionally done
- Likely to succeed
Moreover, hiring a finance professional early on can help your business gain from their insight from the start. This will save you time rather than hire one at a later date.
To have valuable advice regarding your company’s legal structure
There are at least three types of legal structures for a business:
- Sole proprietorship or sole trader
- Limited company or corporation
If you’re self-employed and issuing invoices under your own name, a sole trader set-up may work for you. Also, as a sole-proprietor, you can deduct some personal expenses from your taxes.
Unfortunately, you’re also liable for any expenses and debts incurred by the business. So if your company:
- Fails to pay its suppliers
- Default on a loan
- Got sued and loss
Creditors can have your properties seized to satisfy your debts.
A limited company, however, offers more legal protection. Generally, only the assets owned by the company can be used to pay its debts. Creditors can’t touch the personal properties of the owners. However, there are exceptions.
Each of these legal structures has its own advantages and disadvantages. If you’re deciding which type to adopt, consider obtaining insights from an accountant.
To receive valuable help with your finances
As the business begins to grow, keeping track of its finances can be a challenge. You may encounter difficulties ascertaining who your debtors are and how much they owed to your company. Fortunately, an accountant can help you put your accounts in order.
To delegate your company’s vital financial tasks
As a small business owner, you have the freedom to:
- Select your working hours
- Develop business strategies
- Increase or decrease your workload (depending on the circumstances)
- Selecting your finances for the business
Unfortunately, by assuming all these responsibilities, it’s easy to feel overwhelmed. Often, your reluctance to allow people to help you is a stumbling block for your business expansion. At some point, you’ll need to trust other people to handle essential parts of the business.
Consider delegating some of your company’s finances. Make sure to hire a suitable accountant since you’re entrusting them with your financial records. If done correctly, you can focus your time and attention in handling the other essential aspects of your business.
Running a business is hard enough. So instead of wasting time on routine tasks such as bookkeeping, consider delegating them to an accounting service provider. An accounting firm that uses cloud-based accounting software which makes it easier for companies to monitor their finances. You can even use your smartphone to check on your company’s cash flow or sales projection. A great example of these online tools is Xero.
David Murphy has worked with Grenfell James Associates since 2006. They provide core accounting services, tax planning and advice, management accounting, and wealth protection.