Many small businesses aren’t sure when to have an accountant step in to help. They may think it’s not necessary, they may not know what an accountant does outside of tax returns, or they may think they’ve got it under control with a good mate that knows a thing or two.
Both in the UK and abroad, this good mate with the savvy tax return knowledge seems to be a common resource come tax time. Naturally, someone charging pennies sounds like a financially savvy approach. If you see good results, there appears no need to look further.
While it’s great to have knowledgeable friends, their knowledge is naturally limited. Unless your mate is actually an accountant, they can offer only so much.
Accounting beyond tax returns
Even the ability to lodge tax returns to full effect is limited for non-accountants, but it’s worth highlighting that tax returns are just one small service offered by this profession. Used to their full potential, accountants are business accounting consultants, not just resources to contract once a year.
Let’s explore some of the benefits of an accountant beyond tax returns.
Preventing problems
Building a business relationship with an accountant allows you to identify problems before they become problems. Your accountant can flag claim issues or worrisome spending and make you aware of actions that could put your business in line for an audit. Mistakes on tax forms, expensive write-offs, and abnormally large charitable donations could all flag your business for a tax enquiry. Communication with an accountant year-round will make it difficult, if not impossible, for these things to slip through the cracks.
Informing decision making
Year-round oversight of your accounts affords you more clarity. With clarity, you can make better business decisions. You can calculate the impact of hiring new staff or making expensive purchases and investments. Rather than just a tax return lodger, you have a financial advisor who can quickly assess your finances and present you with predictions of how certain decisions will impact your business. This budgeting and monitoring help you ensure cash flow is steady, and decision-making is informed and backed by your business’s financial data.
Expansion advice
There is no greater investment than business expansion. Like advising on your financials to predict the impacts of certain decisions, your accountant can advise what would need to be done to prime your business for expansion. Not only can your accountant tell you your current business status, but they can also advise on steps that you would need to take to set yourself up for expansion. Beyond the ability to assess your books, a qualified accountant with large business experience knows what needs to be done to expand. They can present options to take your business to the next level and share recommendations based on the nuances of your business.
Securing investment 
Not all businesses will have the liquidity to expand without outside investments or bank loans. To secure such financing, your business finances will need to be presented with complete transparency while also reflecting the full potential of your business and a strong case for why an investor would want to invest. Up-to-date accounts, performance forecasts, and advice on the best investment options are all within the remit of your qualified accountant.
Tax service benefits beyond the basics
Holistic accounting services, such as those above, are of incredible value to all businesses that are serious about achieving stability and long-term success. Just as important is tax and VAT management. And no, this isn’t where a friend could do the same job.
Let’s explore what an accountant can do for your taxes that an unqualified friend cannot.
Secure all of your deductions
Tackling your tax at the end of the tax year is already too late to maximise all of your deductions. While your friend may be able to lodge your return based on the information you provide them, an accountant can make recommendations throughout the year to maximise your deductions. There may be purchases you should or should not make and decisions you should or should not take to secure all of the deductions available to your business. To get all of your deductions, you need advice before the tax year comes to a close.
Set up your VAT
For smaller businesses just reaching the threshold of £85,000 annual turnover, you’ll need to set up your VAT, which can be an arduous process. One which an accountant can do with complete ease, saving you time, money, and the burden of stress.
A good accountant can also help with your bookkeeping, pension set up, auto-enrolling, and other staff onboarding services to ensure that you’re financially compliant and that the staff are set up right from the beginning.
Ultimately, your friend will not know your business’s financial ins and outs and your industry. And they will most certainly not know how to offer sound business advice based on your business, your industry, and the current financial support available.
An accountant can help set you up for success, achieve long-term business goals, and partner with you to thrive with complete comfort that your business is making the best, informed decisions.The MGroup employs a team of experts with diverse experience across industries and accounting specialisations to offer our clients a holistic accounting service to meet their every need. Contact our team today to learn how we can add true value.