You may ask yourself the question from time to time do I really need an Accountant? Although there is no legal requirement for an individual or a limited company to have an accountant, there are many benefits in having one. The first being less stress for you when it comes to dealing with the financial side of things.
Most of us often feel like the job is done best when we get it done ourselves. Or sometimes we feel that it is more cost-effective to cut out the ‘middleman’ and get straight to it. Although this is true in many instances, it is not always the best mindset to have when dealing with your financials. Whether you are an individual trading as a Sole Trader or running a Limited Company, you are required to either; submit an income statement to HMRC or submit your annual accounts to Companies House. Preparing both incorrectly could result in penalties and fines, which quite frankly anyone would want to avoid.
What does an Accountant do?
Accountants are trained to ensure financial reports operate within the law and HMRC guidelines. They specialise in checking, analysing and preparing reports based on the financial activity of a business.
How can having an Accountant benefit my business?
- Saving you money: Although at first thought hiring an accountant can seem like an added expense. It is in fact a great cost-saving decision over the long term. Accountants are trained to identify and advise you on the best ways to save your business money. Not only are they able to guide you on the most tax-efficient way to operate and advise you on when to pay dividends. They can also advise you on business decisions which will help save you money. They can also advise you how and when to pay yourself Dividends, also letting you know when there may not be enough profit available to declare as Dividends. This can also save you an extra tax charge of 32.5% on your Director’s Loan Account Balance.
- Avoiding Penalties: Having an accountant will help you keep on top of your deadlines. Failure to submit to Companies House and HMRC on time can result in fines that range from £100 for a day to £1,500+ for a six-month delay.
- Time-efficient: One of your main priorities as a business owner is to grow your business and maximise profit, whilst always delivering an excellent service. Keeping the books up to date to preparing financial statements means that you will be dealing with a lot of admin tasks. Which can be a very time-consuming process. This is where having an accountant can be more valuable to you than not. Hiring an accountant gives you back the time you need to focus on growing the business, whilst feeling confident in knowing that your financial and tax affairs are in good hands.
- Less Stress: Doing your own bookkeeping and accounts can sound like a straightforward task when you say it, but this is far from the case. As your transactions start to increase and deadlines start to fast approach, this can become a very stressful task especially when being done alongside everything else. Many business owners find it quite hard to juggle the importance of statutory deadlines with their own priorities in the business. And quite often, the statutory deadlines fall short. This results in a backlog of work and penalties from HMRC which ultimately causes more stress. Letting an accountant deal with this for you will definitely take a heavy burden off your shoulders.
- Eliminating Errors: There are many areas that having an accountant can save you money and this is one of them. When preparing financial statements, it is important that you understand the accounting principles. If not, you may open the door to a ball of mistakes that could end up costing you a lot of money to rectify. Submitting incorrect accounts to Companies House depending on how the mistakes have been dealt with.
Overall, I think it’s safe to say that although hiring an accountant might be an extra expense, taking into consideration the cost, time and tax savings; it is definitely an expense that is worth it. Here at Outsourced ACC, we are a team of experienced accountants who are able to advise, assist and take control of any financial needs you may require. For a free consultation please give us a call on 02082496000.
Written by Tricia Carr