When to Hire an Accountant

When running a business, it can be hard to know when to reach out and add extra help to your team, whether that’s employees or just external service providers. With the wealth of accounting software today, it can be just as hard to know when to hire someone to help you manage the financial side of the business.

Accountants primarily can help you to establish the legal structure of your business, provide experienced advice around accessing finance as well as keeping on top of day-to-day record keeping like invoices and expenses. But as a business owner, when exactly should you hire one?

1.    If you are a limited company.

For limited companies, setting up a corporate structure is imperative to navigate legalities like paying yourself and any potential tax implications. Depending on the goals you have in mind for your business, it is wise to consult an accountant to help define any potential legal structure before it begins trading.

This structure also ensures the company is recognised as a separate legal entity from yourself, which protects your personal assets should the business face challenging financial situations.

2.   For assistance with accounts and tax returns.

Arranging annual accounts and filing associated tax returns are oftentimes complex processes and are best handled by professional accountants with years of experience.

With many compliance requirements, it is important to be filing the correct information, at the correct time, otherwise you could face financial ramifications like fines or audits. This worry is mitigated when employing an accountant, as they will know the correct way to complete these filings, which helps also save money by helping to accurately classify any tax deductible expenses.

3.   For forecasting cash flow.

Surprisingly, cash flow is often cited as one of the most common reasons for businesses to fail within their first twelve months. A majority of the time in these cases, accountants have not been employed or consulted and there is no 12-month forward looking forecast which identifies any shortcomings or financial issues to be handled in advance.

Accountants can assist with this by undertaking the forecasting, as well as identifying whether the business would ever need to take out a loan or raise equity finance. Additionally, these plans can help small businesses set achievable financial goals and targets for the future, helping to set you up for success.

4.   In case of a legal investigation.

No business owner wants to risk being financially investigated by the authorities for what is often just a simple beginners error on the incorrect paperwork. Audits can be expensive, time consuming and worrying, especially if handled independently.

Alongside an accountant, some of the worry is eased. Accountants will offer advice on how to work within every step of the investigation process, whilst protecting the business by ensuring it will not violate any tax laws afterwards. They’ll also most likely have produced an audit trail which makes the process easier for both your business and the tax office as seeing what transactions have taken place over time, and who authorised them, halves the investigative legwork.

5.   When your business grows.

Companies often grow unexpectedly. One new client or project can leave small business owners scrabbling to grow their business quicker than they first anticipated.

When your business is flourishing, an accountant can take care of any growth transitions, like hiring employees or purchasing more office space. They can focus on things like payroll, employee tax managements, property tax or rent and utility payments, whilst also using accounting software to analyse cash flow, stock management and pricing.

Plus, specialist accountants can help small businesses with more than just numbers. They can provide invaluable insight into how to properly grow your small business through findings from their financial analysis. That analysis could help forecast things like when the best time would be to introduce a new product or service to your business.

These five pointers are only some of the ways accountants can help out during every stage of your businesses development. The right accountant can make life easier by unburdening you of any complicated or financial stresses, which leaves you free to focus on the day to day.

As a last tip: An accountant partnered with cloud-based accounting software is also another invaluable tool, as you'll not only be able to keep abreast of what your accountant does, but you’ll always be able to see your company's financial situation at an easy, digestible glance, too.