It’s possible to both run your business and maintain its books. However, there will always be times when you will need an accountant. Aside from keeping track of your financial transactions and budgets, they can do much more. As trained professionals, accountants can help:
- Manage your company accounts
Businesses need accurate and up-to-date records such as account receivables, inventories, sales and account payables. Your company also needs to follow government rules and pay taxes on time. You also need to realise that failure to report income involves fines and penalties. To prevent such issues, consider engaging the services of an accountant or bookkeeper.
- Decide on your purchases
To succeed, companies need someone who can calculate current purchases and project future purchases. You’ll also need to know your break-even sales volume, the optimum amount of inventory and even profit margin. Accountants can provide help in this regard. Also, they can help determine if your pricing strategy will work or not.
- Set goals for your plans and goals
It’s essential for any business to set up plans and goals for expansion. Such ambitions will often require a financial component such as a budget for new equipment. To check the financials of your strategy, consider discussing the numbers with an expert.
- Provide financial proof for your decisions
To make informed business decisions, you’ll need an accurate picture of your company’s:
- Cash flow
Accounting can provide such vital data. It can also help you evaluate your investments since they may require a considerable amount of money. You’ll need a thorough analysis of costs and expectation of revenue. Often, computing the return on investment (ROI) can provide a rough estimate. There are also other considerations that only financial experts can determine.
For example, you have to choose between constructing a new building or simply extending the existing one. While a new plant may cost £500,000 compared to an extension cost of £100,000, the former may provide bigger revenues. This is where an accountant’s services can prove invaluable. They can analyse the figures for each investment and present the results to you.
As small business owners, you’re probably used to handling everything by yourself. Unfortunately, you can’t handle all the financial aspects. Also, entrepreneurs with little experience in accounting or bookkeeping may miss the chance to lower costs or increase their revenue. By letting people trained in financial matters look into your accounts, they can identify both opportunities and dangers relating to your business.
Starting your business
Even before you set up your company, it’s wise to consult an accountant. You’ll need their services to complete tasks that will ensure a successful start to your business. Some of these tasks include:
- Selecting a suitable business structure to register as a sole trader, partnership or corporation.
- Crafting your business plan, including financial analysis.
- Selecting suitable accounting software to set up in your company.
- Obtaining advice with regards to opportunities for raising capital or loan approval.
- Ensuring that your business complies with government regulators.
- Accurately tracking and classifying all expenses.
- Filing all your tax dues and paying them on time.
For your daily operations
After successfully launching your business, an accountant’s services are still indispensable. They can provide help and advice with regards to your company’s regular operation. Some of the services they provide include help with:
- Hiring employees or independent contractors.
- Reviewing your financial statements and ensuring that they match company records.
- Regularly monitoring and administering payroll.
- Ensuring that all your tax filings and payments comply with government regulations.
- Creating year-end financial reports.
- Understanding financial terminology in vital documents.
Accountants can also provide recommendations with regards to the use of financial software and online transactions. In countries such as the UK, companies can pay their taxes digitally. To further understand how this works for them, consider visiting this site.
For your business expansion
Once your company starts to grow, you’ll need to check if your finances are ready for any planned expansion. An accountant is an essential part of such plans since they can provide relevant advice and guidance on such matters as:
- Finding viable sources for additional cash inflow.
- Reviewing business cycles or patterns and managing inventories.
- Searching for financing opportunities.
- Selecting suitable real estate property and office equipment.
- Creating financial forecasts to help you make informed decisions.
- Setting up a budget that will account for the expenses for your expansion.
The above are the various ways in which an accountant can provide valuable service to business owners. As finance professionals, you can ask them for advice. You can also outsource your paper work on a regular or case-by-case basis. There’s no need to assume all the risks when it comes to handling your company’s finances. Accountants can provide an insight into your company’s potential that you couldn’t imagine. If you don’t have an accountant yet, the above should motivate you to do so.
David Murphy has worked with Grenfell James Associates since 2006. They provide core accounting services, tax planning and advice, management accounting and wealth protection.