Unfortunately, many small businesses go bust within a few months of their inception. It is not just limited to small businesses though, even the bigger business may struggle with cash flow issues. Interestingly, one of the most significant contributors to this is improper planning. Failing to hire an accountant or accountancy firm is one of the issues. Most business owners think that they can handle the accounting themselves, but without the correct experience, they are setting themselves up for failure.
Read on to learn what accountants do and why almost all businesses will need them.
What do accountants do?
Internally or externally, an accountancy team has a number of responsibilities. The overreaching arc of their job is to prepare and examine all financial records to ensure that they are compliant with the country’s laws and regulations. For a business, accountants have a few key daily duties:
- Financial reporting or bookkeeping. This involves the maintenance of immaculate financial records detailing all the company’s business transactions. The monitoring of expenses, income, assets, and liabilities for tax purposes. The creation of profit and loss statements, income statements and balance sheets. This is all to show the business’s financial stability and keep a record for tax purposes.
- Regulatory compliance, despite the size of the business, there are rules and regulations that must be adhered to for the business to be legal. These can differ depending on the size or locale of the business, so it is an accountant’s job to make sure the company complies.
- They also provide financial consultancy. It is an accountants job to advise business owners so that they can make well-informed decisions.
Why do businesses need an external accountant?
With bigger business, there aren’t always the resources or time available for employees. Some roles aren’t seen as necessary to employ a specific person and so it is worth outsourcing aspects of the business like payroll and forecasting, as well as other roles. Qualified accountants with a bit of knowhow are exactly what every business needs. You do not want any financial mishaps or disputes to arise because of poor accounting in-house.
Unless you yourself are a qualified accountant, you should be way of attempting to do the accounts for your business. Hiring an accountancy firm from the offset can help your business stay on the right track. They can help you draw up financial plans and projections. Once the business starts to get off the ground, an accountant can help to set the most suitable financial structure for the business.
Hiring an accountant also means that the business will follow all necessary laws from the beginning. Therefore, if your business is audited, you will pass, which improves credibility and stakeholder trust. In addition, accountants are finance experts, and so the advice they can give is unparalleled whether in purchasing an asset or drawing up contracts or negotiating with vendors.
Tax laws are often updated, and it the accountant’s job to stay abreast of them. As they are highly knowledgeable in tax codes, they can also help you to save money on your taxes. Most businesses, particularly the smaller ones, are unaware that they can apply for certain tax exemptions. Accountants can give several tips to lessen the financial burden of a fledgling business or a reputable business that is continuing to grow. However, if a full-time accountant simply is not in your budget at this stage, you could use other methods. For example, if you are looking for accountants in London, you can try a company like Azets who have years of experience, and they will make sure you are fully compliant and keep you up to date on any changes in legislation.
If you struggle with the back-office finance and accounting side, or if it is simply too time-consuming for you, an outsourced accountancy firm would be especially beneficial to you. For every business, an accountant is a huge help in navigating business challenges and avoiding expensive mishaps. So you can shift your focus back to the aspects of the business you excel at, whether serving customers or building your team or growing your business.