Is it time to hire an accountant?
Like many businesses in the UK, 2015 may have been an extremely successful year for you. Since this time last year you may have grown in size by doubling your sales, increasing your revenue or extending your workforce. However, this could also mean that your finances have become much more complicated than completing a simple spreadsheet to track your work, invoices and payments in preparation for an online tax return.
All of a sudden you may have new things to consider, such as would it be beneficial to become a limited company? Should I move premises to cope with expansion? Should I be paying an ‘average’ flat rate of VAT? Not forgetting how to go about Auto enrolment.
Not every business needs an accountant. If you are knowledgeable on how the UK’s tax and legal system works, you enjoy the financial side of a business and you are willing to put the time and effort into your accounts, you could do it yourself. Although, when most business owners get to this stage in their business it may be the right time to consider hiring an accountant.
To help you here are some tell-tale signs that you need to hire an accountant:
- It is taking up too much ‘valuable’ time.
Let’s say that you usually charge your clients £100 an hour for your time or even £1000 for a day’s work. Whether taxes or book keeping takes 10 hours or a day this is costing you £1000 in time that could be spent working on your business. Not forgetting amending any errors that you may have made.
Depending on the services you require, hiring an accountant could be cheaper than spending valuable time on your accounts that could be spent on generating or retaining business. - You feel like you could be saving tax somewhere?
Often business owners will be given tax advice from all over the place, which can make completing tax returns very confusing and put you at risk of making errors. Furthermore, much of the friendly advice you are given might not be right for your business in particular.
It is an accountant’s job to be up to date with all tax laws and aware of any changes so that they can offer the right advice and hopefully save you money in taxes. As I’m sure you have heard, a good accountant will pay for themselves in tax savings. - You are considering changing your legal structure?
Sole trader and limited company taxes and liabilities differ from each other, so before you make the switch you may want to consult an accountant. As your company grows your profits and liabilities tend to grow with them, so for tax and legal reasons it could be much more beneficial to become a limited company. However, it needs careful consideration as it isn’t right for every business and reverting back to a sole trader isn’t as straight forward. - You are in need of another pair of eyes
Often business owners can be accused of being too into their business to see the bigger picture. As business advisers, many accountants can be there to fire fresh ideas at you if the business is going through a sticky patch or better still help you if your business is growing faster than expected. They can use your financials to advise you on making decisions such as acquiring a competitor, taking on new employees or moving premises. - You are applying for a business loan or an overdraft?
Banks like to see that you have an accountant, so having an accountant could actually be beneficial when applying for a bank loan. Your accountant can also advise on which loan would be best for you and help you with the application if there are any tricky questions the bank has to ask you.
Accountants should be worth the money you pay, as in addition to saving you time and money, every time you need any support with a business decision your accountant should be there to offer the right advice.
If you are still unsure whether an accountant is for you then call E R Grove on 0121 559 1071 and we will see if we can help you.