A great entrepreneur is at the heart of any successful company. However, you’ll almost always find an expert accountant behind them. Accounting allows a company to maintain complete financial control while lowering tax and other expenses. People with the ability to run a company do not have the knowledge or desire to also handle the books – and they definitely would not have the time.
When your company reaches a certain size, it’s a good idea to employ a professional to handle the accounting Firms so you can concentrate on running the business. A successful accountant, on the other hand, will do much more than just free up your time. Businesses who employ good accountants also get a variety of other services as well, which can help them save money, minimize risk, comply with regulations, manage growth, and prepare for the future. Since the majority of your major decisions as a business owner would have a financial component, it makes sense to consult with your accountant first.
1- Improving cash flow
Cash flow management is an essential aspect of business that many startups ignore. Even if a company appears to be profitable on paper, it will easily become insolvent if it does not have cash on hand. A good accountant can ensure that the cash flow is high enough to protect you from risks while also growing investor and stakeholder trust.
On the other hand, as a director, you can need to withdraw additional funds from your business. This can be done by a director’s loan, but these must be treated with extreme caution, necessitating the use of expert accounting.
2- Setting up your business
Many businesses struggle because the estimates and projections were not thoroughly checked. When drafting your business plan, an accountant will assist you in laying some firm foundations. They will provide an objective second opinion free of emotional prejudice, as well as insightful advice on important topics like your business model. A business plan that has been signed off by the accountant is ready to go – and would therefore appeal to investors.
An accountant will also help you decide if you should operate as a sole trader, a limited company, or something else. Each has its own set of financial consequences, and some will be more appropriate for you than others.
3- Paying the right amount of tax
You don’t want to pay any more tax than is required, but underpaying will land you in hot water with HMRC. As a consequence, when it comes to your company tax return, you might want to err on the side of caution. An accountant will more accurately measure the costs and allowances, and hence should be able to find considerable savings while preventing costly errors.
4- Saving tax
An accountant stays current on tax law and is aware of all the ways you can legally minimize your tax bill. He or she can spot valid tax-saving techniques like using government benefits, allowances, expenses, offsetting losses, or modifying the way you earn money from your business.
5- Reducing your workload
When your company really takes off, you’ll need more of your resources to focus on day-to-day activities rather than finances. Similarly, if the company’s finances get more complicated, you’ll almost definitely need to hire a professional to manage them.
6- Bookkeeping and financial reporting
Financial reporting to HMRC is a legal obligation, and bookkeeping is an essential part of handling the business’s finances. As part of a comprehensive service plan, a successful accountant will have both.
7- Funding for growth
Many companies may need additional financing at some point in order to expand. Getting funding from a bank or another source is a big step because lenders and investors want to believe they’ll get a good return on their investment. Your accounting Firm will be critical in making a compelling financial argument to the appropriate stakeholders.
