What’s the point of an accountant?

Today I have a guest post from the team at Accounts and Legal. I'm considering getting an accountant myself so this was an interesting read for me. I hope you enjoy.

When you start a blog or find yourself doing one-off jobs in your spare time, you might not think of yourself as an entrepreneur. But if things go well, without even knowing it, you can suddenly find yourself a small business owner. When this happens, business finances are sometimes neglected, and the benefits of an accountant or some basic business advice are often not realised.

At Accounts and Legal, we get calls from small business owners like this every day. They may have been trading for years without keeping any formal accounts, and even if they have registered as a sole-trader or even incorporated a company, they have never really had the time to do their accounts properly. Things are a bit of a mess, and they think they need an accountant, but all they’re really expecting is a bookkeeper.

Not same same – different!

Bookkeeping is the very basic task of entering your company’s income and outgoings into some form of database, and filing returns. It doesn’t take much specialist knowledge, but it is perfectly possible to run a business with a bookkeeper, without an accountant.

Accounting is more complicated. To become a qualified accountant, years of specialist training in tax legislation, accounting best practice, and business theory must be completed. This enables accountants to provide insight into your company accounts. A bookkeeper can make sure your accounts are in presentable order and your returns are filed on time. An accountant can help increase your profit margins and grow your business.

But how?

An accountant will advise you on the most tax-efficient structure for your business, and how to change as you grow. They can help you find large tax savings through their understanding of things like allowable expenses, the VAT flat rate scheme, tax-free benefits, share structures, and how to divide income between dividends and salary.

They can help you write a good business plan, giving your business the best chance for success, and providing an impressive asset for any funding applications. They know all of your funding options, and can advise on the best route for you.

They can evaluate your business’ strengths and weaknesses, and help you develop a strategic plan to increase revenue. They can bring their experience with hundreds of other businesses, and their understanding of markets, new legislation and the economic climate to help with planning and financial forecasting.

Who’s your CFO?

If you’re running a business, but business itself has never been an interest and you don’t have the time to learn, getting a good accountant is like appointing a CFO. If you don’t feel you need the ongoing support of an accountant, it might still be worth approaching one for some one-off advice.

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This guest post was written by Natalie Butlin from small business accountants Accounts and Legal, who offer a full range of tax and accounting services alongside real business insight.