There are many good reasons for hiring an accountant, whatever the size or type of your company. That doesn’t mean employing an accountant on a full-time basis, but having them for a few hours support each week or month can be a very valuable investment. Not only can they provide financial knowledge and skills which you might lack, but they can also help free up your time so you can concentrate on what you do best – running the business.
An accountant can help:
- With the finances. An accountant can help with the bookkeeping, VAT, tax and other government returns, provide payroll services and assist with a host of other daily financial tasks. They can also help analyse your financial situation and identify key trends which will help you understand your business better, as well as keeping an eye on cash flow, a key metric for most businesses.
- With your company’s legal structure. An experienced accountant will understand what legal business structures are available, and what might be the most appropriate for your business. They can also outline for you the legal and tax implications of such structures, and assist with the set-up and registration of companies. Furthermore, they are likely to know appropriate lawyers who can assist with the process as well, saving you the difficulty of finding your own.
- Write a business plan. Anybody looking for funding via a bank loan or overdraft, or trying to attract private investment from a venture capitalist or business angel will need to write a business plan. The chances of getting any money from these sources without one are practically nil. An accountant will be able to bring their financial knowledge and advice directly to bear in drafting a business plan. Not only will they be able to produce and present the appropriate historical accounting data and future financial projections that are required in any plan in the right format and in line with recognised international standards. They will also have an appreciation of what other analysis is required as well – a business and economic environment overview, market and competitor analysis, a SWOT (Strengths, Weaknesses, Opportunities, Threats) assessment etc. Without input from a qualified accountant, it can be difficult to create a plan that is realistic, professional and detailed enough to convince.
Furthermore, having an accountant on board can increase your chances of getting that loan or financing. The bank or investor may draw comfort from the fact that there is a professional helping managing the finances of the business, whilst the accountant can answer any questions that they may have about revenue projections and expenses.
- If you are audited. Whilst unlikely to happen to you, there is a small risk that your business could be subject to a government audit, most likely in the form of a VAT inspection. Rare as such events are, however, anybody who has ever been through such an inspection can attest to how stressful and time-consuming they are, and how inspectors will not only penalise you for discrepancies found but also target your business for regular, future, follow-up visits. An accountant can not only help you manage the inspection process and ensure appropriate action is taken to address any weaknesses found, but can also minimise the damage associated with such visits by introducing suitable controls and procedures before any inspection occurs.
- You delegate. Many small business owners enjoy the feeling of being in control and managing all aspects of their business. However, as their business grows, the ability to manage everything becomes more and more difficult, increasing workload and stress, and reducing the amount of time that can be spent on core tasks such as new business and product development, or launching into new markets. Delegating your company’s financial affairs to an accountant helps free up valuable time and allows you to concentrate on other things, knowing that an expert is there looking after them for you.
- With buying or selling a business. If you have decided to buy an existing business rather than start from scratch, you should always consult an accountant before deciding to commit to it. They will be able to look at the company’s financials in detail, and see if anything looks wrong. They can check, for example, if the company’s assets are fully owned, leased or partly-financed, whether the company has any debt, or has appropriate insurance or government licences in place. They can also look at some key financial rations to help assess whether you are buying a valuable business – or a dud.
- Equally you will need a good accountant if you decide to sell your business. They can produce the accounts and financial statements you will need to show prospective buyers, and can also discuss accounting and other financial matters with the buyers’ advisers during the due diligence process. An accountant can also help structure your financial affairs so that you maximise your returns from selling the business, and advise you as to the most tax-efficient exit strategy.
An accountant can help you at every stage of a company’s development, from initial set-up and business acquisition, through establishing appropriate controls, securing outside investment, growth and eventual sale. That does not necessarily mean hiring an accountant full-time, but having one to support you for a few hours each week or month could make all the difference, allowing you to concentrate on growing the business knowing an expert is on hand to manage the finances. Having the right financial support will also give you peace of mind, allowing you to delegate the one part of your business which may lie outside your comfort zone. A good accountant pays for themselves many times over.