Top 5 Benefits of Having an External Accountant
Most businesses fail because of poor financial management. This is because business owners think they can manage it all on their own. Most people don’t service their cars at home. Instead, they bring them to a professional mechanic who can keep things running smoothly and spot potential issues. Small businesses need just the same attention from an accountant.
Accountants do more than tax filing. They can take a comprehensive assessment of your finances and create a forecast through the year to keep your business at a healthy, prosperous state.
It may feel daunting to let an outsider in on the intimate details of how your business is run, especially if you have had trouble managing your finances in the past. However, partnering with an accountant will actually help you to achieve your goals and set you up for long-term success. With that, here are five reasons why it’s important to have an accountant for your business.
Save Time… And Your Sanity
Let’s face it, the biggest reason for hiring an accountant is that it will save you buckets and buckets of time. They will deal with all the complicated regulations and deadlines, but they also know the tricks and workarounds for getting things done more efficiently. This frees up plenty of valuable time that you can spend on growing your business, expanding your team, and improving your product.
People who do their own taxes often complain about how dense financial language can be. Well, believe it or not, but that language is second nature to an accountant, and they will be able to decipher the most complicated issues in no time.
Saves You Money
Another massive benefit of hiring an accountant is that it saves you money, both in the short term and the long term. Not only will you need to pay your accountant less than a full-time employee or in-house accountant, but you only pay them based on the services they provide you, which varies based on the size and type of your business. Furthermore, accounting responsibilities often vary depending on the time of year and the tasks at hand. With an in-house accountant this means you will often have seasonal fluctuations in workloads, which means you could be paying them a much larger salary for the same outcomes. A good external accountant measures their success based on results and will do anything in their power to take your business to the next level.
Experience and Knowledge
When it comes to the financial tasks of running a business, experience and prior knowledge is everything. Navigating the dense web of financial regulations and keeping up to date with legislative developments and news from HMRC can be incredibly daunting, but that is what accountants do every single day. Not only do they understand the current landscape, but they understand the historical context of tax legislation, which is vital when assessing whether new laws impact your business.
If anything, this is a great way to learn from your accountant and to understand the fundamentals of accounting from a verified expert. For example, with Making Tax Digital just around the corner, we’ve received a lot of questions from people about the implications this has on their business and what they need to do to comply with the new regulations. HMRC has a knack for introducing legislation that is unnerving for those who aren’t in the know but enlisting the services of an experienced accountant means you won’t have to run around like a headless chicken looking for all the answers.
Sometimes all you need is an outside perspective on your business, like a mentor or business coach. The very same is true with accountants. They don’t necessarily work for you, they work with you and are always going to give you a no nonsense, straightforward answer. Furthermore, they aren’t involved in your company or part of the overarching internal structure, so they can give you untainted advice based on their professional opinion. They won’t get involved in office politics and don’t get distracted by irrelevant statistics. After all, they are ‘bean-counters.’
Business Experts within your sector
Many external accountants have years of experience working with businesses within your sector. Not only does this mean that they understand your business or service (which is always important), but they probably also know exactly what the financial implications are. As a result, they can apply this knowledge to their advantage and won’t be caught out or fazed by the challenges of your specific business.
We, for example, have lots of experience working with service businesses, like marketing agencies, lawyers, and IT companies. This means we know exactly how strict tax legislation affects the complex and fast-paced business world of these particular industries. In some cases, this experience can even allow us to inform our clients of potential opportunities for more business growth.
If you are looking to hire and external accountant with an internal accountant’s style and take ownership of your business finances and taxes, then please get in touch with Defacto-FD. Not only do we pride ourselves on our approachable and transparent style, but we have experience with all sorts of businesses in a wide variety of sectors. Don’t forget to read our blog on who we are and what we do for more information about Defacto-FD.