There are good reasons for hiring an accountant at different stages of your business’ growth. From a business plan to company formation, mortgage application to tax investigation, an accountant can make life easier for you at each step.
Like all small business owners who are looking to save money, you may think you can’t afford an accountant. But look at how long it would take you to do certain tasks (such as taxes), and ask yourself, is that a good use of your time? – let’s say it takes you 10 hours to do your taxes, and your time is worth £100 an hour. That’s a cost of £1000 to do your taxes yourself. And there’s always the risk you’ve made errors – especially if you’re multi-tasking like most business owners, or unaware of the tax reliefs that may be available to your business.
However, if you get an accountant to take care of time-consuming tasks like taxes, it’s quite likely they will cost less per hour than you would pay yourself. You’ll not only have extra time to free you up to generate revenue, but you’ll have peace of mind that an expert is taking care of the details.
So what other moments during the life of a typical small business, might you want to hire an accountant to help you?
Writing a business plan
You might need a business plan to set yourself a growth target, apply for bank or other investor finance or to share your growth projections with suppliers and customers. If you involve an accountant while you’re writing your business plan, they will help you create a business plan that’s realistic, professional and more likely to succeed.
Hiring a professional at this early stage will mean you get the benefit of their financial knowledge and advice right from the start. That could save you time and money compared with hiring one later.
Advice about your company’s legal structure
Not all businesses have the same legal structure – Some might be called limited companies, limited liability partnerships or general partnerships, others could be sole traders or proprietors.
You should carefully consider each type before deciding which one best suits you. For example, you may do business as a sole trader or sole proprietor, working on a self-employed basis and invoicing under your own name. If this is the case, you might be able to offset some of your living expenses against tax.
However, this also means you could be held personally liable for any business-related obligations. If your business fails to pay a supplier, defaults on a debt or loses a lawsuit, the creditor could legally come after your house or other possessions.
With a limited liability company structure, it’s different. As the name suggests, the liability of the business is limited to the assets owned by the business, not you personally (though there may be exceptions in some circumstances).
An accountant such as LeeP Accountants can explain the legal business structures available and help you choose the one that best suits you.
Help with the finances
Small business accounting can quickly become complex if you do it on your own. If you feel you’re losing control of who owes you money and how much or getting confused with your debit and credits, an accountant can help you get back on track – they went to Accountancy school for the best part of 4 years so use that knowledge!
You may also want to measure key business metrics, such as the ratio of salaries and other employee payments to total revenue. An accountant can help here by managing your payroll and producing graphs so you can see how the ratio changes over time.
If your accountant uses cloud-based accounting software like we do here at LeeP Accountants, they’ll be able to share your business accounts with you quickly and easily. And they can produce tables and charts that will help you understand your company’s current financial situation at a glance. This will help you monitor the pulse of your business.
As a small business owner, no doubt one of the things you like best is that you have control. You can set your own working hours, form your own business strategy, regulate your workload and determine your own finances. And being the master of all of these things is a wonderful and liberating feeling.
However; the flip side is that some business owners can feel overworked, partly due to a reluctance to allow other people to help out. You might feel that no one can possibly know your business as well as you do, therefore nobody can handle any part of your business as well as you can.
Inability to delegate can mean you’re left feeling overworked and stressed. At some point you will have to let go, and learn to trust other people to handle some parts of your business so that you can look after the rest.
Delegating your company’s financial affairs is a good start. You need to choose the right accountant and make sure you trust them with your company’s financial information. Once you’ve handed over your company’s finances to someone more experienced in accountancy than you are, you will have more time to concentrate on other aspects of your business.
Some of the most successful business owners in the world are experts at delegating work to the right people!
If you’d like to talk more about whether you should start using an accountant and whether LeeP are the right Accountants for you, then call us on 01733 699033 or email [email protected] for a no-obligation conversation. We have affordable packages starting from just £49+ VAT/ month or one-off services to suit your needs.