Posted: 8. October 2019 by: Rupert Tennant

When Do You Need An Accountant?

When do you need an Accountant

sesauer October 8, 2019

An accountant is an essential part of your team, and it’s the employee that will save your company the most money in the long run. However, many small companies still hesitate before they hire one. That’s because it’s an expense that a small company can’t always take on.

It’s important, therefore to look for signs that you definitely need one. When you notice those signs, it’s best to go into your budget plans and find a way to hire one because your business will be better off that way.

Founding a company

The first step in creating a business is already the one you need an accountant for. The way the company is set up will affect how it’s taxed and how it’s treated when it needs to pay off the debts that it has accumulated. This is where an accountant can help you in planning ahead.

The process is also time-consuming, and it’s often best to leave it to the accountant to handle it for you since it allows the owner to deal with more important issues such as making the company run on its own.

Payroll

The most common tax expense that you have to pay is the payroll tax meaning the one that’s being paid on the salaries paid to your employees. This is the easiest tax to deal with since it’s simply a percentage of the salary paid to the worker. However, it’s done every month, and there is a lot of paperwork involved. That’s because you need to provide the paperwork for the employee and HMRC.

It’s sometimes best to leave this work to the accountant so that you can focus on more important things when it comes to running the company.

Audit

An audit is a process in which HMRC checks up your tax documents and makes sure that you’ve reported your taxes as you should have and that you’ve paid all the taxes in accordance to your tax returns. This is often a difficult spot to be in since it shows that HMC things something is wrong with the way you’re handling taxes.

If your company has followed the law, there’s no reason to worry about an audit. However, it can be a big task to handle since HMRC could ask for your documents dating years back, and a company needs to hire a professional to arrange for them.

Transferring money

Small companies have a problem when their funds and the funds of their owners are interconnected. This presents an issue especially when the owner wants to withdraw some of the company money since they are just an employee of a separate entity and it’s not always possible to take the money from the business.

This also presents a challenge in terms of how the income will be taxed since the income is sometimes taxed as the salary of its owner and sometimes as a dividend. This is where an accountant helps.

Business plan

Writing a business plan is an essential part of running a business, especially in its early stages. The plan will be used by the banks to decide could they borrow you money and by the other businesses working with you, especially larger ones, so it’s a crucial document.

It’s possible to write the business plan on your own, but it’s much better to hire experts to pitch in as well. One of those experts should always be an accountant since they can help with you financial planning more than anyone else and they know what your obligations towards the government are.

Advisor

In the end, an accountant can be an advisor for the company. This is a general-purpose advisor and thus can help your company in a variety of different cases in circumstances. However, this too can be a source of problems since that puts their role too broadly.

An advisor is especially useful to a small company that’s run by the experts in the field the company works in. They usually don’t know how to deal with the financial and managerial side of things, and that’s where the accountant could come in handy.

Conclusion

An accountant could be of great help for a small company. That’s because they can help with one of the most important expenses a small business has and that’s the expense that’s oriented towards the government and HMRC. Accountants could also play a larger role since they know about your business more than any other employee.

They are also useful to those who are just starting their business and the ones that are looking towards an audit since an audit is such an important event for a small business. In the end, they could take on the burden of payroll taxes and let you focus on what’s important.