Small businesses often put off hiring an accountant until they’ve grown bigger, but that’s a mistake that can actually delay growth. The services of an accountant extend beyond simply minimizing your tax bill, although that’s an undeniably valuable advantage. In addition to saving you time and money, a good accountant helps you to manage your cash flow, plan ahead, make smart decisions and reduce any risks to the financial health of your business. Here’s why investing in a quality accountant beats the DIY route every time.
1. Save Money On Your Tax Return
Let’s start with the most obvious advantage of hiring an accountant: to save money in taxes. Filing your taxes is notoriously complex and even a small, innocent mistake can result in a hefty fine. Chartered accountants train for years in order to be able to complete this process accurately, so doing your own return puts you at risk of making expensive mistakes.
Furthermore, a qualified accountant will have up-to-date knowledge of tax breaks, loopholes and business incentives to save you a sizable sum of money that you can re-invest in scaling up. If you do your own accounting or go with a very cheap firm, you’re unlikely to benefit from these savings.
2. Free Up Valuable Time
In addition to saving you money, an accountant will also save you a lot of time that you can put to far better use. As a small business owner, it’s vital that you keep accurate financial records and stay on top of your accountants. However, it’s equally true that your efforts are most valuable when concentrated on your area of expertise. Hiring an accountant allows you to ensure that your accounts are being managed well whilst allowing you to focus on growing your business.
3. Startup Advice
As mentioned, many small business owners are reluctant to hire an accountant in the beginning stages. However, an experienced accountant will be able to provide valuable advice during the startup stage that can accelerate your growth on areas such as:
- Key financial risks
- Financial forecasting
- Tax incentives
- Overall financial health
Hiring an accountant from the very beginning can help you build a solid financial foundation to ensure that your business is around for many years to come. They can advise you on which legal structure to choose and offer unbiased, constructive criticism of your business plan. It’s also worth noting that an accountant-approved business plan is more attractive to prospective investors.
4. Manage Cash Flow
Managing your cash flow well is essential to the growth of your business. Poor cash flow management is a serious threat to even the most profitable businesses, so it’s very important to get it right. Accountants are experienced in managing cash flow and can produce regular forecasts to ensure that you always have enough funds to continue operations as you scale up and market conditions change.
5. Growth Management
A quality accountant can help to fund and manage the growth of your business. Firstly, an experienced accountant will help you to identify sources of funding and present your case to potential investors. Additionally, they can also help you manage sudden growth spurts and ensure that they don’t overwhelm you and damage the financial health of your business, as is often the case.
6. Market Knowledge
It pays to hire an experienced accountant who knows exactly where your company is positioned in relation to your market sector. You can leverage this knowledge to create your unique selling point, price your services appropriately and gain a competitive advantage. In short, an experienced accountant allows you to benchmark your company which is incredibly useful for growth.
An Accountant Is An Investment
It pays to hire a high quality, proactive accountant. Whilst there are many cheap services out there, you’ll see the greatest return on investment from hiring an accountant who has the time, knowledge and experience to grow your business. A good accountant will do everything they can to not only save you money on taxes but to provide valuable advice, manage your cash flow and secure the financial health of your business for years to come.
Did you know we’ve also got a free downloadable eBook dedicated to the most common profit draining mistakes made by small businesses. Check it out here.
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