The small business owner often asks “should I hire a small business accountant?”
The small business owner should find a local small business accountant. A small local practice is ideal, Usually, you’ll find one or two qualified accountants and a small team of trainees or partly qualified doing the donkey work.
Large corporations usually have “in house” accountants and employ the services of the large accountancy for audits and the preparation of accounts. This is a situation you can aspire to, in the early days, it’s far too expensive and totally unnecessary.
One of the first thoughts that comes to mind is “He will ensure I pay the correct types of taxes at the right rates and at the right time”. This is of course true, provided you ensure the correct records are kept, and just as importantly, made available to him. He can only know about what you tell him.
The regrettable lack of psychic powers aside, the accountant can perform some remarkable activities on your behalf when he is in full possession of the facts. To know that someone who knows just as much about taxation as the taxman is acting - and sometimes fighting - for you can be a great recipe for a good nights sleep
He can advise you on the legal deductions you can make ensure the correct separation of your personal and business expenses. He will know of items you can set off against your tax bill that you would not even think of. Conversely, he can spot those things that are either not deductible, or where only a proportion is allowed.
Organizing the records and deduction PAYE and National Insurance (both the employer's and employee's contributions) can be an onerous task on its own. Having an accountant running this aspect of your business will help protect you from nasty tax surprises down the road and will keep you on the straight and narrow.
Your accountant does more than just sorting out your taxes, however. Accountants help in the growth of your business. It’s surprising just how many businesses fail following rapid expansion without adequate funding. Again, an accountant can keep and eye on the level of working capital and help in seeking the necessary funding should it be required.
View your accountant as a friend and colleague and never be averse to discussing problems with him before they get out of hand. There are few things more sickening in life than hitting a major problem and learning that it could have been prevented had your accountant been aware of it.
The most overlooked area of running a business is making provision for that time in the future when you decide to put your feet up and enjoy the fruits of your labors. Nobody has the intention of reaching retirement without adequate plans having been made to fund it. Unfortunately however, far too many businessmen put it off until it is too late. Time and consequently life go by far more swiftly than is appreciated by the young so an early discussion with your accountant and, perhaps, another financial adviser is called for.
So, if you have yet to appoint a small business accountant, you really should do so without delay.
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