Small business owners often wonder if they really need an accountant to run their business. It is a good question. Managing your own finances can feel like a saving. However, finding a reliable accountant is an investment, which will save you money in the long run and help free up your time.
A good accountant can give you clear understanding of your financial position. This will help you know how your business is performing and what impact any changes you make will have on your profits and tax. An accountant will help you have a clear picture of your finances and where you could make changes to increase your profits, improve cash flow or reduce tax.
The other ways in which an accountant can help with are:
Business records accessible anywhere
HMRC and Companies House require you to keep your financial records for up to 6 years. A good accountant will help you to keep your records organised and in digital form accessible anywhere to the standard HMRC expect.
Free up time to spend with your customers
Accounting standards, the rules for the content and layout of your accounts, change on a regular basis. It takes time ensuring you are up to date with these changes and preparing compliant accounts accurately. This will reduce the amount of time you could be spending with your customers.
Avoid late filing penalties
HMRC and Companies House will issue late filing penalties immediately if your tax returns or accounts are filed after the deadline has past. Sometimes penalties are imposed by mistake. An accountant can ensure you meet your filing deadlines and appeal against penalties.
Save time running your payroll
If you have employees you will need to complete a weekly or monthly payroll for each payment you make. You will need to send the payroll to HMRC in real time using software compatible with their systems. Preparing a payroll is specialist work often done more efficiently by payroll professionals. Accountants can run weekly or monthly payrolls for small through to very large businesses, with a wide range of payment types and ensure you hit HMRCs deadlines and tax requirements.
Avoid VAT errors
VAT rules are changing and require quarterly returns to be submitted using software compatible with HMRC systems, known as Making Tax Digital. Setting up the software to complete a VAT return is complex and time consuming. The legal rules covering VAT are also complex and can be difficult to interpret and to apply. A VAT professional can help save you time and money and keep your business compliant with the rules.
Is an accountant necessary?
If your organisation is above the audit threshold you will need to engage an auditor, (for a limited company if your turnover is more than £10.2m) otherwise there is no legal requirement to appoint an accountant.
Smaller organisations are not audited, but are required to file tax returns and accounts and can be inspected by HMRC at any time.
There is no reason as a business owner you cannot manage your organisation’s financial affairs but to do so takes time away which could be better spent with your customers and growing the business. There is also a higher chance of errors or missed opportunities without the expert guidance of an accounting and tax professional.
If you would like an experienced guide to help you maintain your business records and with filing accounts and tax returns, please get in touch.
