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If you’re a successful small business owner operating as either a Ltd company or a sole trader, you’ve probably asked yourself the question, ‘’do I need an accountant?’’ and if so, why?
In this article it’s the why we’ll be looking at, as understanding the advantages of having an accountant make it much easier to answer the first question.
You likely already know that keeping on top of your finances is critical to the long-term success of your business. But most of us lack the skills, time or patience to deal with higher-level accounting tasks ourselves.
Luckily, there’s a number of ways in which a good accountant can give an overall boost to your business, and make a major contribution to its financial health and management. Aside from the obvious, such as the time-saving benefits of handling your accounts and tax returns or explaining complex financial statements, an experienced accountant can do a lot more for you.
And savvy entrepreneurs would be wise to take advantage of the diverse and valuable advice, insights and support they can offer. Which we’ll be exploring in this article.
So let’s examine exactly what kind powerful advantages an accountant can offer and how they can help you achieve your business goals.
Manage Cash Flow
A well managed cash-flow is pivotal to the ability of your business to operate. Without a steady and reliable flow of cash even a profitable business could literally collapse, overnight in some cases.
Once you start adding up the mountain of transactions that you need to keep track of, this soon becomes a full time job. If you are not able to maintain proper oversight of your cash, then this will affect your decisions regarding your spending and earnings.
You can’t make payments or purchases confidently if you aren't certain about the security of your financial position in cash.
A dedicated accountant can vigilantly keep track of your cashflow for you. They will alert you when it needs an injection of funds so you avoid incurring debts, and ensure you have sufficient funds available so you don't miss potential investment opportunities when needed.
Measure Performance
If you don’t track and measure your success, how will you ever know if you are seeing progress towards your objectives?
Although this sounds obvious, it’s reportedly the number one reason why start-ups fail. The ones that succeed all understand the importance of measuring business performance.
And they don’t do it themselves; they use an accountant.
For their expert analysis and valuable forecasts/predictions they can provide. By working with an accountant you can establish clear and realistic expectations for performance, in the form of KPIs and success metrics.
They can then give ongoing insights and advice on how to hit your targets or change course when necessary. This is a key priority for any serious business.
Manage Growth Effectively
An expanding business needs to be especially careful where and how they use their financial resources. On the one hand, you don’t want to be overly reserved and miss out on hiring great talent or adding new services that can drive growth.
On the other, you don’t want to flippantly spend money beyond your means.
Whilst you explore development opportunities to increase revenue an accountant can take charge of making sure that the basic and fundamental finances are in order. Like managing payroll and tax, so your business is as financially efficient as possible. Ensuring that you are paying employees correctly and aren't paying too much tax or making errors in your filings that could result in fines.
Most importantly they suggest cost effective measures you can take, such as the reshaping of staffing or adoption of new systems to help you stay on a safe and productive growth course.
Business Advice
Accountants aren’t just number crunching machines. They are also a wealth of knowledge on all things business related. As they’ve dealt with hundreds of entrepreneurs from a myriad of different backgrounds and industries.
So they’ve encountered all of the issues a sole trader or Ltd company might face. You can leverage this knowledge by asking them for tips and advice when taking important business actions.
This can help you spot trends and opportunities and stay compliant with changing regulations. Furthermore they’ll be able to connect you with other resources that support your business in other ways, such as marketing, advertising, events, etc.
For example, at Crunch we have an online community of over 40, 000 freelancers, self-employed entrepreneurs and SMEs just like you. By becoming a Crunch member you’ll get access to our Chorus community where you can ask questions about any business matter under-the-sun!
Online vs. Traditional
It’s fair to say that we may be slightly biassed here but, the reality for most SMEs is that they are far better off with an online accountant.
Firstly, due to the extortionate costs of traditional accountants, and secondly, as an online accountant can typically do everything they can do and more. For a much cheaper price.
For example, Crunch has different packages specifically designed to meet the varied needs of Sole Traders and Ltd companies. Plus we provide access to real human support whenever you need it - the best of both worlds. Also as most online accountants use cloud-based software, this minimises risk of data being lost or damaged.
*Self Assessment
One area in particular where online accountants can be especially useful is self assessment. Gathering together financial data for filing a self-assessment return can be a major stress for self-employed people. At Crunch we offer a simple, quick and easy Self Assessment service that will have an expert accountant do the whole task for you.
This is essentially just an overview of the core advantages an accountant can bring to any ambitious small to medium sized business. Accountants will all have a range of unique and personal skills and resources they could offer.
As we’ve tried to make clear in this article, in truth, no effective business should be without an accountant. And for SMEs, online cloud-based accounting is by far the best option. So the prudent choice for smart sole traders and Ltd company owners would be to sign up to one today.
