The difference between a savvy business owner and one who is not could be the difference between whether or not you end up becoming a huge success or part of the failed business statistics. Four in ten small business don’t make it past the first five years and although no one sets out to fail there are lots of reasons why companies do. Some may be inevitable: changes to market conditions or the economy, or personal reasons. There are some reasons though that are not only inevitable, but are fundamental issues that business owners need to consider from the outset. One of these is whether or not they should hire an accountant to manage their business finances.
A good accountant can be the difference between success and failure for a new business. If you are thinking of making a saving by not hiring one to help you then maybe this will help you see why that would be a false economy.
Get your business set up right from the start
Accountants are highly-trained specialists in how to run and manage businesses. That includes knowing the ins and outs of the tax system, the different types of company set-ups, and understanding business and financial planning. They can advise you on whether you are better off as self-employed, as a limited company, a charity, or a limited liability partnership. Each has its pros and cons and a good accountant will go through what your business is about, what your expected turnover will be, how much you want to take out of the business to live on, and advise you on the tax and administrative implications of each one. An experienced accountant will also have clients in similar industry sectors and have the benefit of experience of that particular market which will help them to better advise you.
VAT: to charge or not to charge?
While most people think it’s as simple as whether or not you are going to reach the set threshold before having to register for VAT, there is more to it than that. A good accountant will talk through the options with you and advise on whether you should be registering for and charging VAT on your invoices.
The difference between being audited or not
An audit can be a hugely time-consuming process and one that could take you away from the day-to-day management of your business while it is taking place. A good accountant will help ensure that some of the triggers that could get you audited – such as mistakes on your tax returns, issues with charitable donations, and write-offs – are avoided or minimised.
Getting your finances and projections right, and keeping them up to date, could be the difference between an accurate future business plan and a raft of substantial changes at short notice. Your accountant is one of your business partners, helping you review your finances and using them to make short- and long-term projections to help determine where you want to take company and how. It will also help with stock ordering and budgeting for larger changes or investments.
For support and a wealth of advice and guidance on making your business a success from the start, talk to us at Hammonds Accountants. We’re on the end of a phone, on 020 8249 6328, or on email at whenever you need us.