Why Does Your Small Business Need an Accountant?

If your business is a relatively small operation, it may seem like an accountant is a bit of a luxury, and an expensive one at that.

But, tax issues and cashflow difficulties are not problems which are exclusive to the bigger enterprises. They could, and almost certainly will, have an adverse effect on your small business if you fail to keep accurate financial records. You only have to look to the headlines to realise that hiring an accountant is not so much a luxury, but a necessity for every business, big or small.

So this International Accounting Day, we take a look at some of the reasons that your small business should really be consulting a chartered accountant.

Everyone needs help writing their business plan

The success of your enterprise, whether established or still starting out, will largely depend on the quality of the business plan you operate from.

A well written, and most importantly well researched business plan will almost certainly make your business seem more appealing to potential investors and will definitely make any future applications for funding significantly easier.

But there are a number of mistakes that can befall the entrepreneur when writing a business plan.

Whilst some issues such as spelling and grammar errors are only aesthetically displeasing, and can be easily rectified by proof reading and remembering to use your word processor’s spell check function, others such as inaccurate market research and unreasonable business goals will almost certainly spell disaster for your new business venture either now or in the future.

Fortunately a chartered accountant will be more than capable of providing you with the accurate financial information you need to both convince possible investors that yours is a potentially successful business, and ensure that your new enterprise manages its money responsibly by ensuring that your books remain balanced and that you are registered for all the necessary HMRC business taxes.

Keeping on top of your finances is difficult

By having an inaccurate, or worse outdated, picture of your company’s finances, you could well be spending money that you don’t have. A bad move for any business.

Add to this the severe penalties that your business could be paying for not keeping up with your tax returns, and it becomes clear that you need to be keeping your businesses finances in order if your small business is to have any chance for success.

But this is often a very time-consuming, not to mention painfully tedious and dull process. One which, as the owner of your small business, you really don’t want to have to deal with at the expense of the day-to-day running of your enterprise.

So by taking on a reliable accountant you will be able to dedicate more time to dealing with your customers and clients directly, which is almost as important as ensuring that your businesses finances are in order.

Add to this the fact that a chartered accountant will be better versed in the various documentation that is required to keep your businesses finances in order, making the whole process more efficient, and the value of a chartered accountant to your business becomes clear.

Growing your business is not as simple as it seems

A growing, successful and financially independent business is what every entrepreneur dreams of. But getting there is far from simple.

Whilst you may eventually have to begin expanding your business as your revenue increases, there are a number of pitfalls, such as unnecessary and unwise expenditures, that you can fall prey to. Pitfalls that an accountant can help you to avoid.

Although not commonly referred to as a valuable resource for the growing business, the advice of a reliable accountant is often crucial if and when your once small enterprise begins to expand.

By identifying areas in which your business can grow through careful analysis of your company’s cash flow patterns, an accountant can create a financial forecast that will highlight exactly how your company should expand if it is to remain profitable.

So although you may feel like your business doesn’t warrant the hiring of a chartered accountant, by choosing to consult one you are almost certainly making the right move for your small business.