By Chris Futcher, CEO of Pulse Accounting
It is an obvious cliché that every business has different needs when using an accountant. Nevertheless, running a successful business is difficult enough in the current challenging economic environment without having to learn the accounting / tax rules, regulations and laws that you need to comply with.
But how do you choose the best accountant to deal with these sometimes mind-boggling aspects and how can he help you drive your business forward and also comply with all the rules and forms demanded by HRMC?
From a business plan to company formation, tax filing, loan application to government audit, an accountant should make life easier for you at every stage of your business.
A good accountant should save you a lot of time, effort and money by:
• Offering you guidance on how to take your business to the next level and the best way to do it, from structuring the business properly to making sure that you avoid common pitfalls.
• Minimising your tax bill by making sure that you’re making full use of any tax allowances and relief you can claim.
• Putting at your disposal an efficient cloud-based accounting software that allows you to access the financial data, anywhere in the world from any device. Also, the software should simplify processes and supply essential features, such as providing a general ledger, detailed invoicing and business inventory.
• Helping you improve your chances when in need of a loan or overdraft. Your accountant can present clear facts and figures for backing up your application for funding. You can also rely on their advice when choosing a specific loan or if the bank's terms and conditions are favourable to you.
• Registering your business for VAT. If your business has an annual turnover close or above £81,000 or most of your business dealings are with VAT-registered businesses, you have to become VAT registered, which means that you can reclaim VAT on any business expenses you might have. At the same time, if you are a contractor you might be eligible for the flat rate VAT scheme. This means, depending on which sector you're working in, that you are able to charge VAT on your sales invoices at 20%, but only need to pay VAT over at 13%. Which means that you simply get to keep the difference. By joining the flat rate VAT scheme though you forfeit the ability to claim VAT back on purchases.
However, this is usually very beneficial to contractors as they do not purchase goods. If you earn £500 per day, this could mean up to £2200 more bottom line profit per month. But with a good accountant you don't have to deal with this complicated process, which leaves you more time to focus on your business.
• Helping you manage the changes your business is going through. You accountant should have a wide knowledge regarding a large number of finance matters. It’s not just balancing your books. If you need to become a limited company or take on board a business partner, you accountant should be able to guide and support you so such initiatives are successful and help you grow your business.
Furthermore, a good accountant could also be a source of new business. They usually deal with all types of businesses and have wide networks of contacts. Especially in a B2B context, your accountant can be a valuable source for getting introductions to important potential clients.
In short, the right accountant should make life easier for you, so you can concentrate on what you love doing. Your speciality is running your business. Leave the financial details to an accountant you trust and he'll make sure that you’re not only complying with all regulations but your business is thriving and developing.