Small business advice
If you run a business, you want to focus as much time as possible on the products or services you provide. An accountant can handle the financial side of things, leaving you free to concentrate on what you do best.
When does your business need an accountant? As a rule of thumb, do so when it is no longer cost-effective (and/or safe) to handle the accounting duties yourself.
As the accountant’s role may be small at first, many SMEs use an external accountant rather than hiring one in-house. However, the role will grow as the business grows, so it is important to choose an accountant with whom you can build a long-term working relationship.
The developing role of your accountant
If you are a sole trader, your main accounting concerns will be paying the right amount of income tax and National Insurance.
If your taxable turnover rises over £85,000 in a 12-month period, you will also need to register for VAT and submit a return once a quarter. Keeping track of VAT becomes increasingly complex the more you trade, so is best left to your accountant.
If your business is a limited company, it will have to pay corporation tax on its profits. To pay the right amount, profits must be offset against losses in the same accounting period, which in turn requires rigorous bookkeeping.
Depending on the nature of your business, you will need various kinds of business insurance. Your accountant can help you work out your requirements in this area, while a financial adviser can help you find the most suitable policies.
As you take on more staff, your accountant may also need to handle the payroll to ensure everyone is paid accurately and on time. They will also have to prepare the financial statements (financial reporting), and may also conduct internal audits and help you prepare for external audits.
Finding the right accounting services
A good accountant can offer a wider range of useful services than you might think. When you contact an accounting firm you should have an initial discussion with them about the scope of your requirements, the nature of your business and your long-term plans. Invite them to propose how they will support your business going forward, and factor this in when considering their fees.