Business owners and self-employed individuals often take it as read that they need an accountant. Outside of these people, there are many who don’t understand the role of an accountant, to the extent that they’ll often believe someone is paying for a service they could carry out themselves.
While accountants do perform some roles that individuals could do themselves – self-assessment tax returns for people with simple tax affairs would be a good example – they also carry out essential functions that ensure complicated processes are completed correctly. Accountants can save businesses a great deal of time and money, as well as ensuring all filings to Companies House and HMRC are done on time.
Why do we Need Accountants?
Everyone is different and has a different set of circumstances and needs, so there’s no one reason why anyone would need an accountant. However, there are some things that anyone using an accountant will have in common, both in terms of the reasons and the benefits of doing so.
Complex Tax Laws
HMRC might say “tax doesn’t have to be taxing,” but rarely is it straightforward. This is particularly true for businesses, who are unlikely to sit and go through tens of thousands of pages of tax laws and guidelines. Accountants can provide the knowledge and expertise needed, and ensure that:
- Businesses are compliant with tax laws in respect of both themselves and their employees.
- Businesses can operate in as tax efficient manner as possible and improve cash flow consequently.
- Business leaders can focus on running their business without worrying about tax affairs.
Business finances at their most simple can be broken down into cash at bank, revenue, and profit. However, several processes go into getting to the figures attached to these. This is where accountants come into their own; they have the expertise to put everything together to come to accurate final figures, while also playing an advisory role in pointing out financial trends within a business. Thus, accountants can help a business improve their profitability by benchmarking against industry and geographical averages and looking at the influence on costs.
It is more the understanding of a financial situation that accountants provide today. Many modern businesses will use automated accounting to have instant access to an accurate ‘real terms’ view of their financial affairs.
Whether you’re dealing with HMRC, Companies House, or you’re looking to attract investors or even clients into your business, accountants can lend a great deal of credibility to what you do. You wouldn’t use an accountant just to increase your credibility as a business, but it is a benefit you get along with everything else.
A great accountant will provide advice and guidance and make your business more profitable, and a guide of how good your accountant is is to compare what you pay for their services to what they save your business, which should always be positive in your favour.