With profits, losses, taxes and more to contend with, being self-employed can sometimes mean having to be an entrepreneur and a financial expert all in one. This is where the benefits of having an accountant come in.
If you’ve started a business or gone self-employed, the chances are you’re something of an expert in your field.
Whether you’re an electrician looking to go it alone or a chef finally opening your own restaurant, you’ll have a degree of expertise in what you do.
But unfortunately, that’s not enough - small business owners are also expected to be experts in finances, and some can find it tricky managing this aspect of their venture.
There is help at hand, however, in the form of accountants. But before we outline why you might want to hire an accountant for your business, here’s a little bit about them and what they do.
An accountant is a qualified individual trained in bookkeeping and the analysis of finances. Part of their duties will usually include preparing annual financial reports, coordinating tax returns and aiding in future budgeting and financial planning.
How much, or little, your accountant does for you is often your decision. Some business owners will only speak with their accountant once a year during tax season, while others will engage regularly, using their accountant almost as a consultant.
However, even if you only ‘use’ your accountant once a year, they’ll be keeping an eye on your books the whole year round. And with a constant finger on your business’s financial pulse, they’ll be crucial in helping you with future planning.
So, in what circumstances should you consider hiring an accountant?
For some, taxes can be a nightmare. Complicated forms, hefty late fines - in fact, knowing your IR35 from your R40 (and the hundreds of other codes) is near enough impossible, unless you’re an expert.
Hiring an accountant to deal with your taxes can be a simple way to make sure you avoid any late payment fines, while they could also save you money in terms of how much tax you actually need to pay.
Running a full-time business takes time. And lots of it.
Outside of your usual business hours you might be ordering stock, striking up new business or taking care of your website.
On top of this, it’s important that your work-life balance works for you, and spending time relaxing with family and friends should be part of any business owner’s schedule.
Sorting your taxes and organising your finances are just extra tasks on that never-ending to-do list, and if your time is stretched as it is, hiring an accountant to deal with this side of your business could be worthwhile.
Unlike bookkeepers who will generally take care of invoices, payroll and the like, an accountant should help their client plan for the future, by understanding their finances and the future landscape.
Sound financial planning and budgeting is crucial when it comes to the growth of your business, and can help with understanding things like when to hire an employee, how much work you can manage, and whether to adjust your rates.
Financial planning is especially important if you’re self-employed, as getting this wrong can impact your professional and personal life.
Aside from helping with your finances, accountants can be a fantastic source of networking opportunities.
Doing the job they do means they’ll speak to numerous business owners on a daily basis, from a variety of professions.
It could be anything from an experienced peer in the same line of work to a marketing consultant who could give your business a boost - accountants are a great way to make industry connections and grow your network.
Accountants can also help when it comes to keeping your business on the right side of the law.
The self-employed are regulated by a lot of different legislation, and understanding it all could be tricky. For example, some business owners fail to take out employers’ liability insurance for their employees, despite this being the law.
They can also help when it comes to deciding which legal structure is right for your business. If you’re currently a sole trader, they may inform you that you’d be wise to switch to a limited company set-up. Aside from moving liability away from your personal finances, this can sometimes also help cut costs and increase your profitablity.
Check out our article on the difference between a sole trader and a limited company in the meantime, if you’re unsure.
Will you be looking to hire an accountant this year? Let us know below.
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