When Should You Hire an Accountant?

Posted by: Jay Redman
Category: Tax & Accounting
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Do I need an accountant given I’m an entrepreneur? You may be asking this question even if you are a small business and we will be answering yes. When do you know that the time has come for you to hire an accountant? At what stage of your development do you absolutely need to have one and should you reach out for help or find an independent accountant. 

Every business across every sector needs an accountant to ensure that you pay the right amount of taxes, keep your records in order and equally ensure that you do not fail any audits from HMRC. Some accountants merely play the role of implementing payroll, managing expenses, and revenues. Regardless of your accounting needs, it is important to have an accountant and this article will give you a general overview of how to think about this. It can be confusing and costly, but our fool-proof guide will help you navigate your new unchartered waters.

Research from the business community illustrates that many small businesses are unsure about whether to hire an accountant, if at all. This guide provides you with useful information about hiring an accountant and when to do so. Starting a business needs a great deal of financial information and data, and it is better to have a professional take care of all this as you may be too busy focusing on other things such as marketing and sales.

For small businesses, the chances are that you are swamped with financials after starting your business. This is why it is important for you to get a tax professional to take care of your vital accounting and financial needs while you focus on successfully running your business.

Accounting is just about growing your business and paying the right taxes

As a small business or entrepreneur, you are always looking for ways to save money. While some may consider an accountant to be an unnecessary expense, they are equally essential in ensuring that your tax returns are not filled with errors. The best accountants tend to look for ways for businesses to save money, and such an approach can help you grow your business and expand effectively.

Do they Add Value to your Business?

Small businesses can equally benefit from more than just recording transactions and abiding by every rule from HMRC. Accountants are equally useful in ensuring that you plan how and when you expand and where you can create more opportunities. Accountants may add value to your business by increasing your revenue or lowering your expenses. They can equally plan your cash flow effectively and help you identify new market opportunities. 

Accountants Make running your business easier

Accountants can ease the running of your business, and they tend to be hired late. A common problem is usually engaging an accountant very late, which does not leave them enough time to identify and prevent the lasting problems from costing the business more. From when you start to when you begin operating, it is easier to employ an accountant. 

What if you’re a limited liability company

This will depend on the role you play within the limited liability company. If you have a financial background and can draw up accounts, then the early stage of the business is something you may handle. However, as your business expands, the administrative requirement may increase over time, requiring some additional manpower. 

However, the initial and early days of a business tend to be preoccupied with planning, marketing, and generating sales activities. Remember that the initial function of your business is to generate income, which requires the skills of an accountant. 

The main purpose of your finance function

The key point of your accountant is to tell you how well your company is doing. It is important to have a system that you can regulate on a constant basis in order to monitor performance and review against your key performance indicators. You should use these figures as a decision-making metric to better equip you for revenue and expense decisions. An accountant can equally perform finance functions as needed, but it is important to understand the various functions of financiers and accountants. However, your business may only need one, so do not hesitate to find the right mix of skills for what you are looking for. For example, you may need help with wrongly charged VAT or refunds, which require someone that has the skill to automate as well as notify HMRC in your Gateway account. 

Conclusion

There are a few reasons why you may need an accountant, and none of these reasons are identical. However, once you register your business and begin making a sale, it is imperative that you have an accountant to record your expenses and revenues and equally pay the right amount of tax. It is important to assess your needs, your budget, and the right tools to accompany your entrepreneurial journey. 

FAQs:

What questions to ask when hiring a new accountant?

You need to ask them if they are certified or have a finance background. Secondly, it is important to know what software they are accustomed to using and whether that will suit your company’s needs. For example, VAT automated receipts and linking bank payments are useful features.

What questions to ask when hiring a new accountant?

In the initial days of operating, you may not need an accountant as you will be preoccupied with planning, marketing, etc. However, once the business begins generating revenues, you may need to hire an accountant. The timing is different for everyone. 

Location of Your Accountant

Your accountant can be located anywhere, but it is important to hire an accountant that has a strong grasp of the accounting laws and practices in your jurisdiction. You can have regular face-to-face meetings and/or skype and zoom meetings if you prefer.

Author: Jay Redman