Six ways your small business accountant can save you money

It’s tempting to want do your own books when you’re a small business owner, after all, no one knows the business better than you, so why pay someone else to handle your accounting? But small business accountants do much more than balance the books. A good accountant will pay for themselves many times over in the tax efficiency, improved productivity, and potential for higher profits your company could achieve. Here are six ways your small business accountant could save your company money.

The right structure

A small business accountant can advise you on the right way to structure your business, whether that means being a sole trader, incorporating as a limited company, a partnership or an LLP. They can also suggest whether it is appropriate for you to register for VAT depending on your company’s annual turnover, and whether it is more tax efficient for you to join the flat rate scheme or not. Tax rules and allowances change seemingly every Budget day, but your accountant will keep on top of the changes so you don’t have to.

Meet your obligations

Your accountant can make sure you always meet your reporting obligations, and that you never miss a deadline to file your tax return. HMRC has revealed some of the colourful excuses it has received from business owners who failed to file on time, including “goats ate my accounts.” Needless to say, this director’s appeal was unsuccessful and they received a fine. Your accountant can make sure this never happens to you. You will also have comfort in knowing that your paperwork is all correct in the event your business is audited in future. An accountant can help you with your personal tax return too – in the last tax year, two million people had not yet completed their self-assessment tax return one day before the deadline, and the last submission for the day was entered at 23:59:43, a very close call for a midnight deadline. Don’t be among those who leave something so important to the last possible second.

Pay yourself correctly

When it comes to taking money out of your business, you need expert help if you want to avoid paying too much tax. For example, taking too much in dividends in one tax year can push you into a higher tax bracket, so you will need to space them out correctly. Keeping your salary under a certain level will also reduce your income tax and National Insurance liability. Bear in mind you will need to keep proper records of your payroll and produce dividend vouchers to keep HMRC happy. There are also rules you need to follow about how to handle directors’ loans from your company, and how to manage benefits like a company car. Paying in to a pension plan can be a tax efficient way to take money out of your business, and your accountant can also advise you on this.

Manage your cashflow

A key part of an accountant’s job is suggesting ways to manage your cashflow so your business has enough working capital to operate successfully and pay suppliers and staff. This may involve finding ways to incentivise your clients to settle invoices on time. An accountant will look at the cash you have coming into and going out of the business, forecast future cashflows and note any potential shortfalls so you have time to build up reserves. This could be incredibly valuable if it means you never have to turn down a big order because you don’t have the cash to expand your payroll or buy extra inventory. Proper cash management means you can grab opportunities with both hands.

Grow your business

An experienced accountant will have watched many businesses like yours move from the startup stage to maturity and profitability, so they will be able to see the big picture when perhaps you can’t. They will have insight into how you can streamline your business, make cost savings and grow by focusing on your best clients and the revenue streams which will make you more profitable. A specialist small business accountant should also be able to help you work out the best way to secure new investment when you are ready to move to the next phase of expansion.

Spend time on what matters

Yes, you might be able to do your own books if your business is fairly straightforward. But the time you spend doing this is time taken away from what you’re really good at: managing your business day to day, looking after your customers or clients, and making the big decisions. Outsourcing your bookkeeping admin to an expert saves you time (and, after all, time is money) and lets your focus remain where it belongs, on your business.