How to Know When Your Business Needs an Accountant

Good financial management is an important aspect of any successful business, it directly affects the growth and stability of the business. While some businesses prefer to manage their finances on their own, completing their bookkeeping and accounts, the increasing complexity of the financial accounting system, changes in regulations etc. actually requires the expertise of an accountant.

In this blog post, we explore the signs that your business may need an accountant. Recognising these metrics will help you make informed decisions to secure the financial health of your business.

What is Good Financial Management And Why is It Important?

Good financial management includes tracking income, expenses, and planning, saving and preparing for future taxes. It is more than just “getting your accounts done” so you “don’t get in trouble with the law (HMRC, Companies House etc.)” It will include preparing financial statements but also analysing and understanding your key financial indicators. Accurate financial records should not only help with day-to-day operations – think cash flow - but also provide insights for strategic decision-making.

Signs That You Need An Accountant

Time Limitations: Insufficient time for, record keeping, tracking and other general bookkeeping activities: If you are struggling to find time to manage your business finances and/or you notice that your financial records are being neglected it is a strong indicator that you need help, another pair of hands, likely in the form of an accountant. It's not uncommon for entrepreneurs to manage different aspects of their business simultaneously, especially in the initial stages, however delegating that responsibility gives you the freedom to focus on your core business activities.

Frequent Tax Issues and Complexities: Tax laws and regulations can be complex and subject to frequent changes. An accountant will be able to give you up-to-date tax allowances and reliefs applicable to you and your business and relevant activities. Depending on how your business is set up/structured there may be certain transactions you would like to make e.g. withdrawing funds for personal use that need unique and/or specific advice on how best to carry out these activities with the best possible tax position at the end. An accountant can help simplify these tax regulations and requirements for you and potentially save you and your business money in the long run.

Limited financial expertise: Accountants bring specialised knowledge and skills providing valuable insights into financial strategies, risk management, and cash flow optimisation. Especially as people who work with many businesses, they can help with profit optimisation and other advice related to your business finances that you may be struggling with.

Need for financial analysis, forecasting and business planning: An accountant can help you create and interpret financial statements. These are often needed for accessing funding from lenders. If you are looking for secure investment and/or grants for your business it would be good to speak to an accountant to help in collating and analysing your financial data and help you with forecasting future trends. This will be vital for any company and/or organisation wanting to make such a decision on whether to lend to your business or not.

Penalties and Fines: Failure to submit annual returns to HMRC and/or Companies House or even submitting late, leads to penalties and fines. Working with a good accountant should usually ensure timely filings, helping you to ensure no deadlines are missed and avoid any associated late penalties.

Doing things manually: If you find that you have an ever-increasing amount of papers, receipts, and invoices, or you are using spreadsheets but the process is not as smooth and seamless as you may have desired, it's possible you may want to engage an encounter who can recommend the right software and systems/processes for managing the finances of your business. It’s worth noting that businesses are required to keep their records for up to 6 years - this can be demanded at any time by HMRC. Would you be in a position to answer such a query from HMRC?

How to Find the Right Accountant

• Start with people you know, and ask for referrals from fellow business owners, friends and family.

• Book an initial call - Ensure you explain your specific needs to them so you don’t rely on general recommendations.

• Ask/confirm their accountancy body – ensure they are fully qualified and get more information on their experience and other businesses they have worked with in the past.

• Understand their policies and terms of engagement, what are their response times, and how often are you able to have meetings and book appointments with them.

• Get different quotes and understand the price/s for each service. Does one price include everything or are there any additional charges?

• Don’t forget to ensure that you choose an accountant that is affordable for you and your business, for the long run - so there is no interruption of services.

• Use the combination of all these to make your decision – most importantly ensure it's someone who understands you and your business, someone you can get along with and that you can communicate with.

Conclusion

Looking at the array of benefits that come with hiring an accountant, it is worth letting go and delegating your finances. When accountants become an extension of your team, they offer valuable insights, advice, strategies, and access to cloud-based technologies that streamline your operations, ultimately saving you valuable time and money.

Beni Ratio Finances Is one accountant you can rely on to offer you the kind of business finance and accounting support your business needs. We have a policy of zero late returns/submissions. We look to give you the relevant advice that's appropriate to meet your unique needs. Why not get in touch today.