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Understanding at What Point Your Small Business Requires an Accountant

When starting up a business, every entrepreneur will want to keep costs down. This is understandable, but one area that you should not skimp on is making sure that your finances are in responsible hands. Finances are the lifeblood of any company, and an accountant can be a tremendous asset for those that want to keep their business afloat. In this article, we’ll be helping you to understand when your business needs the help of an accountant.

Accountant small business

During the Early Stages

In the very early stages of your business, you may not think that an accountant is needed due to the relatively small size of your operations. This is far from the truth however, as they can assist in a number of tasks and processes that will save a lot of time further down the line. This includes drawing up a business plan, as financial projections will form a major cornerstone of your plans for the future. It can be easy to over or under estimate what your new business is capable of, so seek expert advice in this regard.

Accountants can also advise on the legal structure of your new business. There are many types of structures that a business can fall under, such as a limited company or sole trader. It’s important to understand what these terms mean and in which cases you would be liable for the company’s debt. An accountant can also advise you of expenses that you may use for offsetting your own personal tax expenses, which ties into this legal structure.

Through Growth and Auditing

Finances can often be neglected by those setting up a new business, as they’re often seen as less important than taking care of the job at hand. This is a bad trap to fall into – once you’ve lost track of these finances it can take a lot of time to get back to grips with them. An accountant can take all the raw data that your business provides, take care of the financial processes, and also give you reports based on these figures. This helps you to stay one step ahead while conducting your business and you can make changes based on the feedback you’re provided with before encountering a serious issue.

When dealing with the government or tax regulators, it’s definitely time to hire an accountant. They’ll assist in getting your books ready and compliant for an audit or investigation. Mistakes can be made when the person dealing with finances is not entirely sure of what to do, then this can trigger an investigation from HMRC. If you want to avoid a fine and get things over quickly, then experienced accountants will help you.

While you may hire an accountant to deal with these government bodies when they get in touch, it can be useful to pre-empt this and have a working relationship with an accountant already, who knows your business and how it works. They will be able to assess your situation and also keep you updated with any new regulations that your business will need to follow with regards to finances. They can maintain your records, file legal documents for your company, ensure that payroll is conducted properly and can crucially correct any mistakes that may be present within your financial documents. Then, if an audit is required, all the hard work is already taken care of and the issue can be handled as quickly as possible.

Accountant small business 2

For Major Business Decisions

For those that are planning on making business decisions, such as buying a franchise or another firm, an accountant’s advice is essential. Accountants can tell you if this will be a viable next step for your business and even forecast whether you can expect this acquisition to be profitable. Accountants can also work in tandem with lawyers on business decisions such as these, so you can effectively cover all your bases. The final decision is yours but additional opinions can prove useful.

If you’ve worked hard to build up your business and eventually wish to sell it, again, this additional advice can be key. Not only will an accountant help you assess what your business is worth, they can also help you decide how you wish to be paid out from the sale. Lump sums and monthly payments each have their own tax implications, therefore, choosing the right one can drastically affect your personal finances.

From the beginning of your business through to the growth and sale, an accountant is very much a valuable resource providing expert insight into an aspect of your business that it simply cannot function without. They can provide valuable mentoring throughout your years in business, and any expense you occur working with them will be recouped many times over throughout the lifespan of your business’s operations.

About the author


Matt Finch is a Content Strategist at Distinctly - an award–winning search marketing agency with a passion for helping businesses grow through SEO, PPC and related services. Email if@itntycnodsicl.o Tel: 01923 728191

The above blog has been kindly supplied by the above mentioned author. The inclusion of this content and any links to another web site, or any reference to any product or service by trade name, trademark, manufacturer, or otherwise, does not necessarily constitute or imply an endorsement or recommendation by D2N2 Growth Hub.