Many professions aren’t as glamorous as they sound, but with accounting the opposite actually tends to be true. People generally view accountants as mundane number crunchers and see their services as commodities. However, the truth is that accountants are valuable members of any small business. They provide crucial advice that can save a company money and help it grow. Let’s take a closer look at how a specialist accountant will add value to your business.
#1 – Tax Efficiency
Let’s start with the most obvious benefit of hiring an accountant: they will ensure that you pay as little tax as possible. An accountant who is familiar with your industry will know exactly what deductions or credits your business is entitled to claim. They will also devise a strategy so that you can capitalise on any incentives available to you, which is particularly important in the wake of the pandemic.
#2 – Compliance
Compliance is certainly not the most exciting part of an accountant’s job, but it is vital that your business stays on the right side of the law. Accountants are familiar with tax law changes that may affect your business so they’ll keep you up-to-date on any new information; no more time-consuming research.
This also saves you money and a huge amount of stress in terms of fines, penalties and errors.
Remember that legally speaking, anyone can call themselves an accountant and set up a practice. Don’t just opt for the cheapest provider when it comes to compliance, because this could land you in some seriously hot water. It’s always best to work with an accountant who is well-versed in the particular rules and regulations of your industry, because this is what will protect your business in the long-term.
#3 – Choosing the Right Business Structure
The business structure you choose can make a huge difference to your tax bill and liability. For example, different structures come with various perks in terms of depreciation allowances or refunds on capital investments.
An accountant will be able to advise you on the most appropriate structure for your particular industry and help set up an entity that reduces costs by taking advantage of loopholes and tax incentives.
#4 – Increasing Profitability
Accountants can help you increase your profitability in a number of ways.
Firstly, they will provide a detailed analysis of your spending and highlight areas where you can save money. This may be renegotiating lease and payment terms, digitising your business and increasing efficiency or helping you to eliminate unprofitable activities.
Secondly, accountants will ensure your books are in order so they’re easy for you to understand and monitor. They’ll also keep track of any changes in the market and make suggestions on how your business can adapt. This way you’ll always be one step ahead and ready to seize opportunities as they arise.
#5 – Cash Flow Management
Cash flow management is one of the most crucial tasks for any business owner. It’s also incredibly easy to neglect, particularly if you spend a lot of time on other areas such as marketing or sales.
With accountants monitoring your cash flow, it will always be up-to-date and accurate. This means they can make recommendations on how to improve your cash flow and avoid any unnecessary delays in the payment process.
Accountants will also make sure you always have a financial buffer so that if times get tough, you won’t run out of money before the end of the month – or even worse – go bankrupt. This is especially important when it comes to small businesses as even a small cash shortfall can have a big impact on your ability to trade.
#6 – Projections and Forecasts
Accountants are able to perform projections and forecasts for your business, taking into account all the current variables. This will give you an accurate picture of what’s ahead so that you can make informed decisions about where future spend should go or which areas need more investment in order to reach projected targets.
If there is a shortfall identified, accountants will be able to make suggestions on how you can adjust your spending and generate the extra income necessary. This way, no stone is left unturned when it comes to financial planning so that you’ll know exactly where your business stands at any given time throughout the year.
This makes them a particularly valuable asset if you have investors or want to attract new business partners, who need to know that your forecasts are accurate and you have a good handle on where the money is going.
#7 – Investment and Funding
As mentioned above, accountants will be able to provide financial projections and forecasts. They’ll also know how much money you need, where it should come from, such as investors or bank loans, and what type of return on investment they can expect if they invest in your business.
They would then help secure the necessary funds by pitching your business idea to investors and working with the bank on loan applications. Accountants will also be able to advise you on tax implications based upon whether an investment is made through shares or other means, which would affect your business in different ways depending on how it’s structured.
This makes them invaluable if you need funding for a new product line or expansion into new markets.
Accountants add a huge amount of value to small businesses, particularly specialist accountants. If you are serious about taking your small business to the next level, then you simply can’t afford to continue with DIY accounting; it’s time to enlist a specialist.