If you are new to business you may think that you won’t need the services of an accountant for at least twelve months when you are completing your first tax return – well think again!
Whether you choose to use an accountant or not, it is good to take advice from one BEFORE you start up. Here are some issues you may not have considered which your accountant is ideally placed to advise you:
- Sole trader, partnership or limited company?
- Do I have to inform anybody about the setup of the business?
- How do you set it up and what if you want to use a trade name?
- How do I get a bank account?
- Do I need to register for VAT and if so how?
- What if I want to employ people?
- The most tax efficient ways to acquire assets?
- How to raise finance? They may even help you with this.
The list is endless! However beyond this initial advice, it is up to you to decide how to manage your finances. You can use the advice as the basis for your decision, to set in place a system to keep up to date with your finances from day one.
Whichever path you choose, we have put together some pro’s and con’s of each to try and help you make your decision.
Let’s start with the benefits of hiring an accountant.
It saves you time
Having an accountant to pass sales figures, outgoings, expenses and more to, takes a big amount of work off your shoulders. Tax returns and keeping the books up to date can be time consuming, not to mention all the forms and documents that need to be kept up to date. Having someone to do that for you will save you time that you can pump back into your business.
It saves you money, if you don’t know what you are doing
Many people who are in business may understand finance and bookkeeping in some way but they probably don’t have an in-depth knowledge. This is why so many businesses hire accountants or have an in-house finance team to deal with the numbers and the books for them. If you don’t understand the paperwork that needs to be completed, you may submit wrong information making this is a situation where having an accountant can really help you.
They can provide you with advice on business growth and investment
Accountants are full of knowledge about where to invest your money and how to grow your business with the best return for your money. Plus, they know all the relevant legislation, tax information and terminology to effectively look after a business’ finances. This opportunity to discuss and gain good professional advice when needed can be invaluable to many businesses, especially those just starting out.
Alternatively, here are the benefits of being in charge of your own business financial accounts.
You have full control over your accounts
When you complete your own accounts, you have full control of making sure everything is accounted for. You will make sure everything is filled out correctly which is perfect for people who have the knowledge to look after their own accounts. However, the process of looking after business accounts can be confusing, so it is a job that should not be entered into lightly. If you are going to do this, make sure you heed the advice from an accountant you acquired initially.
Cuts an overhead, saving you money
Paying an accountant every month, especially a good one, can be a costly expense for your business. For a small business, this can be an expense they simply cannot afford to pay out for. However, on average, many businesses see the expense of paying an accountant a worthwhile investment to keep their business on track and their finances accounted for.
It could save you precious time
Dealing with outside parties who perform a service for you includes a level of communication between each other. When it comes to your accountant, you need to send through expenses, up to date figures and inform them of any significant financial changes. For so many businesses, this time spent communicating with an accountant is a small price to pay to not have to deal with their own business accounts.
There are many options for you to take into account when looking at how to manage the finances of your business. It is a big decision but one that ultimately comes down to what works best for your business based on the advice and information you have heard from an accountant initially.