As astounding as it may sound, only a minority of 30% small business entrepreneurs feel that accounting services are required. Since a penny saved is a penny earned – a trend that is bound to pick up weight due to Covid-19 – it appears that even more business owners have joined ranks in the misconception that they are actually ‘saving’ themselves on accounting fees by doing things themselves. But is this true in the long run?

An accountant’s role has diversified. No longer is it merely accounts. Now an accountant’s role covers:

• - Aiming to reduce your tax bill as much as is legally possible
• - Seeing that you have the right software for your accounting needs
• - Working towards aiding you in the proper management of your company’s finances
• - Guiding you on HR and employee rights

What an accountant can do for a small business or startup:

Small business owners tend to underestimate the requirement of an accountant thinking that only large firms have that much work that they need to have someone do it. But as many a start-up will realise – running a business and handling the books is not exactly a cakewalk especially when it comes to updating and amending. Tallying up is a whole new ball game altogether. Thus, having an accountant can prove really useful in:

• - Keeping your business posted as to legislative changes
• - Getting the annual accounts ready and filed on time
• - The completion as well as filing of the compliance and legal documents that are needed for the business
• - Keeping your company updated on the government’s register and record details like appointment or resignation of a director
• - The every pay run task of payroll processing, submission, payslip printing and associated tasks like ensuring tax codes are updated and correct and that PAYE and NIC have been deducted accurately.

Why proper accounting for startups cannot be overlooked:

The startup process is difficult as it is a new situation and you need to begin from the grass roots. But this is why it is just as important to get things right as otherwise one might face long term repercussions as the backlash of decisions made in ignorance. Therefore, it makes sense to enlist an accountant to advise you on:

• - What the best structure will be for your business i.e. sole trader, limited company or a partnership
• - Why keep your expenses separate from your business and also, how this can help you and how this can be done
• - Analysing your financial forecast and plan for your business – opening a bank account for your business, following the various government compliances, keeping a track on the day-to-day expenses and the like
• - Determining what accounting software is most suited to your needs

How is it that accounting services never grow old?

Apart from self-assessment, an accountant can prove useful in a whole host of ways that many business owners fail to acknowledge. For instance, they can smoothen the loan process by ensuring you have the right documents, work on succession or planning of your estate as well as reviewing documents, contracts and the like. It is possible also for an accountant to serve on a virtual level as a CFO.

Where business owners err by not selecting an accountant:

1. 1- Cost cutting – how wise is that?

Most startup entrepreneurs and small business owners would undoubtedly consider cost cutting as an effective means to bring down soaring costs in the present circumstances. However, there are certain activities where experts can prove to be essential. One such avenue is business accounting. While it might for instance appear to be fairly simple to process reports from a software and then submit them, reconciliation is equally important – more so in the circumstances of a surprise audit.

Furthermore, when the government announced the Coronavirus Job Retention Scheme, many employers went ahead and began to process and submit the furlough claims for their staff themselves. However, recently the HMRC has initiated compliance checks on the same and employers find it difficult to send HMRC the detailed data requested while at the same time fearing the chances of an unintentional error. Reports and records also need to be kept for a minimum of 3 years (if payroll) and 5 to 7 for accounts. Thus, doing it yourself may prove to be costly and stressful in the long run. An accountant is aware of the company’s financial situation as well as its operations. Thus, financial advice is best sought from someone in the know.

1. 2- Loan processes – preparation matters

In the current economic scenario with more and more people seeking loans, getting one approved is more of a challenge. An accountant not only can make your presentation on your loan reasons backed by solid figures but also can open you to new avenues of financing. The loan agreement and its consequences on your taxes and accounts is something that an accountant can guide you best in.

1. 3- Keeping a tab on your expenses

Knowing how you are spending and keeping proper records will help maintain good cash flow and prevent you from over spending. An accountant can help further more by bifurcating the expenses especially if you have a home office where expenses are most likely to overlap. Keeping receipts filed and handy of the following can be useful:

• - Living expenses – rent of your office space, phone and broadband charges, electricity bills
• - If you use your car for business purposes then costs incurred for the same as well as those of commuting to your workplace or for business related reasons
• - Meals and any entertainment that related to business centred meetings

You can track these by physically filing receipts, or you can sign up for cloud-based accounting software that digitally tracks all your expenses and can even do it automatically. Having a bookkeeper to sort these for you will undoubtedly save you time and hassle.

Doshi Accountants handles not only accounting for small and large firms but also, property accounts, management accounts, bookkeeping, taxation, VAT and even payroll services. It can also assist with the start- up stage of businesses. It is important for a business owner to be aware for instance, of tax obligations and what expenses can be claimed against them.