Most of us have heard about the term “accountant”, while some have even met one. But, for new entrepreneurs, the roles and responsibilities of an accountant for business may be unknown. An accountant is a mastermind who scales up businesses and makes them successful.
If you wonder, “what should my accountant do for me?” this post is for you.
Table of contents
● What does an accountant do for businesses?
● How to choose the best accountant for business?
● How much does an accountant charge?
● Conclusion
What does an accountant do for businesses?
An accountant in your business helps to meet and comply with the statutory obligations, prepare and file your tax returns on time, help you with business planning, and conduct essential accounting tasks.
In short, if you get an accountant, you can run your business with clarity and confidence, save money, boost revenue, and free up time from distracting accounting tasks.
Here is a list of activities that an accountant performs for you.
Assistance during the startup process
When starting a business, you need to consider numerous actions and systems to set up the foundation of a successful business. What do accountants do?
They help you to:
● Determine the best business structure according to your current situation
● Help you make a good business plan
● Assist you in selecting the proper accounting procedures
● Advising on which type of accounting software you might require
● Help you in opening a business bank account
● Make sure your accounting procedures follow government regulations
● Provides advice on tracking expenses and recording business transactions and regularly
There are a few more responsibilities of an accountant that coincide with other businesses, irrespective of size and type.
1. Filing tax forms correctly
An accountant can help you fill out tax returns correctly by considering your transaction records. They keep all the relevant documents safe to be produced at any time during an audit or investigation. Furthermore, they are aware of tax deadlines and prevent penalties for a late submission.
2. Reduce your tax bills
Accountants with tax specialisations can help you legally reduce tax bills by identifying deductions and reliefs. The HMRC offers several tax deduction schemes in the UK that you must consider to bring more money home.
3. Track your cash flow
Managing cash flow in any business can be challenging for owners with many core business activities. However, an accountant keeps a keen eye on your financial statements to understand where your money came from and where it went. They advise you on how to handle the situation.
Furthermore, they can predict the cash flow situation in the future and help you prepare cash reserves and a monthly spending plan.
4. Help in making business decisions
Accountants upgrade their knowledge daily, which means they are aware of changing tax laws and other regulations. Furthermore, they analyse financial statements to find loopholes, areas of improvement, and growth opportunities. Depending on their conclusions, owners can make critical business decisions.
5. Saves your time
Time is money for any business, so owners must work hard on core business operations rather than spend time on repetitive accounting tasks. But, it’s the responsibility of an accountant to finish them, and they have the proper skills and knowledge to complete tasks accurately.
6. Performing regular business operations
Without a bookkeeper, accountants can help you record and manage transactions and create financial reports. Additionally, they help in,
● Explaining financial statements for owners to understand the ins and outs of a business
● Focusing on the company payroll and payment processes
● Advising on tax payments
● Closing your accounting books correctly at the end of the year and creating financial reports
● Keep you updated with the latest government regulations and ensure all your accounting
processes follow them.
● Help you in applying for a loan or find investors for funds
● Assist you in a detailed budgeting
● Help in managing inventories and finding strategies to save money
● Make your business unlock the power of technology by automating all your accounting processes
How to choose the best accountant for business?
When looking for an accountant, starting with personal recommendations from business associates or people you know, and trust is good. However, you can search for them on various platforms and look into client reviews.
After choosing a few names, you can meet them personally and ask questions. It might include their education, certificates, licenses, experience, area of expertise, services, fees, and others.
Getting an accountant qualified through a recognised UK body like ICAEW, ICAS, ACCA, and others is good. A chartered accountant has an international level of professionalism.
Furthermore, you must ask about their availability, range of additional services, ways of communication, and hidden charges.
How much does an accountant charge?
The charges of an accountant vary on various factors, and the major ones are the size and type of business, responsibilities, business turnover, and financial or tax complexities.
An accountant can charge you according to experience, qualifications, certifications, range of services, or location. For example, the charges of a chartered accountant are more than that of a certified one. Similarly, hiring a regional accountant is less expensive than working in large cities like London, Manchester, and Cardiff. Remote accountants tend to be more cost-effective.
Plus, the rate can be a fixed amount paid monthly or yearly or a price per hour. Make sure you ask the accountant any questions related to their charges.
Though it may sound like an extra cost to startups or businesses with tight budgets, you can reclaim a part of your spending on tax returns. They help you save money in numerous ways and protect you from unnecessary penalties.
A business doesn’t mandatorily need to hire an accountant unless you meet any two of the following conditions:
● The business has more than 50 employees
● Annual turnover is more than £10.2m
● Assets worthy of more than £5.2m
Under such a scenario, you need an external accountant/auditor.
Conclusion
You can save money on accounting fees by purchasing software like Xero and QuickBooks, automating your accounting tasks, or outsourcing to a third party.
However, you can take up the accounting responsibility if you are good with numbers and have excellent analytical skills. A professional knows more than you, saves money, time and effort, and follows government regulations.
