Why businesses need an accountant in 2017
You don’t enjoy it.
I think that most business owners don’t really enjoy bookkeeping or accounting. They end up doing it late at night or on weekends, when they’d rather be spending time with their family and friends. Yet they carry on because they have a do-it-yourself (DIY) attitude and they think hiring an accountant is a luxury. After all, why not work a little later and do the books yourself?
Well I think that attitude needs to change. Getting an accountant or bookkeeper is not a lifestyle decision, it’s a business decision. Investing in professionals – or changing the way you use them – can bring considerable returns.
They’ll keep control of your tax obligations, identify savings, and help you grow your business. And yes, as a bonus, they’ll give you back your weekends. You just need to use them in the right way to make sure your money is well spent.
Here’s what you’re missing
As a small business owner, you have to do a lot yourself. There simply isn’t the money to outsource much. In deciding whether or not to get outside help on something, you have to ask if doing it yourself creates extra risks or costs.
Here are the potential downsides of DIY bookkeeping and accounting.
- You miss out on tax breaks by failing to claim valid expenses.
- Also you fall behind with invoicing (and with chasing unpaid accounts).
- And you underestimate your tax bill and get into trouble with the government.
- As a result tax returns and other compliance paperwork is filed late, which produces fines.
- And the books end up with mistakes that take hours to fix.
- Most importantly you don’t have reliable information to help you make business decisions.
You may also run into issues when Her Majesty’s Revenue & Customs (HMRC) implements their Making tax digital plan, which is on target for a 2018 launch.
Why you need to get an accountant or bookkeeper
There are so many things an accountant or bookkeeper can do for you but here are some key areas where they’ll help your business immediately.
Clean up your books once and for all
When business owners do their own bookkeeping, it often only happens when they can find the time. That’s not really giving your financials the attention they deserve, and it results in:
- data-entry errors
- lost documentation (such as proof of purchase for expenses)
- missed tax breaks
- books that are out of date
If you get an accountant or bookkeeper, they’ll clean everything up so you have accurate records backed up by documentation.
Setting you up with software
They’ll even set you up with software that makes it much faster and easier to record future income and expenses. That way you’ll never fall behind again – and you won’t have to pay for someone to come and enter data for you.
Do your tax really well – and on time
Late filing or payment of taxes results in penalties and interest. We’ve taken on clients in the past who’ve lost thousands this way. When you get an accountant, you won’t miss any more deadlines. The good ones will work well in advance so that tax filing is smooth and stress-free. You’ll forget what it was like to dread tax season.
Plus an accountant can often reduce the amount of tax you have to pay. If you engage them at the start of the year and ask for tax planning services, they’ll come up with a strategy that keeps more money in your business.
Improve your invoicing and cash flow
Your invoicing system is central to the health of your business. If you don’t bill efficiently, you won’t get paid quickly – and that’ll leave you short of money. It sounds basic, but this factor alone undermines a lot of businesses.
Get an accountant or bookkeeper to set up an automated invoicing system and you’ll be able to:
- send invoices quickly
- check at any time to see which ones have been paid and which haven’t
- give customers a choice of multiple payment methods
Accountants and bookkeepers can also give you good advice on invoice payment terms, to help reduce the time you spend waiting on money to come in.