In theory at least, it has never been easier for small businesses to manage their financial affairs without having to rely on outside help. Online tax returns, for instance, give you an extended deadline for filing, automatic calculation of your tax liability as you fill in the form as well as the possibility of a quicker repayment if you are due one. This is in addition to software packages that, when used right, can keep you fully up to date with what’s happening in your business and ensure you’ll never miss a deadline.
For a startup the pressure is on to keep a tight rein on overheads. Why should you spend money on outside help with your accounts if you are capable of dealing with everything yourself? You may be able to get away with a DIY approach at the seed stage. As turnover increases and your business takes off though, things can all too easily run away from you. Here are some of the signs it may be the right time to put your financials in the hands of a professional.
Ignoring the problem is not the way to deal with that mountain of paperwork. You’ll no doubt be able to convince yourself that you’ll get round to it eventually, but when exactly? Leaving tax returns and other documents to the last possible minute increases the chances of mistakes being made and deductions and allowances being under-utilised.
Few individuals start a new business expecting to be able to work 9-to-5 hours. Nevertheless, there are only so many hours in the day and you need to consider closely how best to use your time. How much time could be freed up by putting your accounts in the hands of professionals? Couldn’t that time be put to better use in generating sales and helping the business grow? Are you in control of your paperwork – or is it in control of you?
Perhaps there are patterns in your monthly profit and loss account that you can’t quite explain? Staring at the figures for hours isn’t going to get you any further forward. Getting professional help often means basic irregularities can be identified and dealt with before a major problem emerges.
Invoices are of little use if your customers ignore them as a matter of course. At the very least, you should have in place a cash flow forecast to identify any problems with liquidity. If there is a major problem on the horizon, an accountant should be able to help you work out the best way to deal with it. As your order book grows, so does the need for a dedicated credit controller.
Are you fully aware of the tax implications of taking on employees? What about VAT registration as your turnover reaches the £81,000 mark? Are you aiming for an export market? What are the implications of doing business with customers abroad? If you’re vague on these points, it’s time to get help.
Ever get the feeling you’re not being taken seriously when it comes to seeking finance from the bank or investors? An amateurish business plan with hazy, inadequately backed-up figures is a sure-fire route to rejection. An accountant can help you present your business in the best possible light.
What instructing a professional gives you is peace of mind. Professional indemnity insurance for accountants and tight regulation means you’re in safe hands. What’s more, an accountant with specific expertise in helping small businesses can point you in the right direction on a host of operational issues – from stock control through to workforce structuring.
Being ‘hands-on’ with all aspects of your business is one thing. At the same time, it is crucial to identify when outside help is needed.