Every company needs an accountant, whether their business is big or small, but smaller businesses initially get the job done by themselves. Either the business owner himself/herself does the accounting, or they hire someone to do it for them. Either way, this is how the initial arrangement for most small businesses begin. Once the venture gains momentum though, this arrangement becomes an inefficient system, requiring additional employees.
Either the increased workload makes it impossible for the owner to serve double duty as the default accountant, or the person they initially hired for occasional bookkeeping finds the increasing complexity of business accounting to be beyond their singular capacity to handle. At the same time, this is a crucial juncture for any small business. Since they are now generating more revenue than before, they are growing into a proper company. If management is unable to maximise this growth, or if they fail to account for the ensuing business taxes properly, this prosperity will not last. Therefore, it is exactly at this point that it makes perfect sense to hire an experienced accounting service.
When In-House Accounting is Not Cost-Effective
Most small companies cannot afford to put an entire accounting department on the payroll, especially when they have just started to see growth. Accounting services offer a much more cost-efficient solution in that regard, but with a greater assurance of speed, accuracy, and quality. For example, several small and medium sized businesses are currently growing in Cardiff, right in between the major enterprises. This is only to be expected, of course, since the flourishing capital is also Wales’s primary centre of commerce.
Consequently, accountants in Cardiff are constantly needed by small, medium, and large companies alike to manage their financials and taxes. To meet this ever-growing demand, several new accounting firms have established themselves in Cardiff, while older, local accounting businesses have further expanded and modified their services accordingly. Even the leading firm of Chartered Accountants in Cardiff, Hodge Bakshi, is now catering to small businesses and freelancers. This makes it possible for smaller establishments to avail their wide range of accounting services related to taxation, payroll, wealth management, bookkeeping, business planning, finance and much more at affordable rates.
When Doing Your Own Accounting and Tax Filing is Not a Viable Option Anymore
Self-employed individuals and small business owners will do their own accounting and tax filing work, but that doesn’t mean everyone can do so efficiently. Almost anyone can easily learn the basics of simple bookkeeping, but it does take some time to learn. When you are trying to grow your business, learning accountancy from the ground up may not be the best option for a business owner. At the very least, the person in charge of accounting should be able to handle the following duties:
System Creation – This is when an accounting software is to set up for the particular company, creating a core system for entering data about all things related to the business account. The data may include, but is not limited to, all information about billings, transactions, invoices, revenues, expenses, profits, clock in/clock out times, projections, etc. Some of the most popular accounting software used for creating the platform are FreshBooks, Xero, ART, my Books, ZarMoney and FreeAgent.
Data Entry – All of those created fields must be filled in daily, if not immediately after. This can be a very time-consuming task which increases company expense by stretching employee hours into overtime. Automation has changed that to a great degree, making it possible for much of the data to be filled in automatically. This is provided that the main software supports various applications which your company uses to receive, send, and record its business transactions. Some manual inputs will still be necessary, but the need to do so should be minimal.
Basic Analytics – As mentioned, much of the manual repetitive work is now handled by the system and its supporting applications, but modern accounting automation can do much more than that. It can help someone with the basic knowledge about business data analytics, generate descriptive, predictive, and prescriptive reports. The reports are meant to help the management make informed future decisions for the next financial year.
That 6-month crash course will not be sufficient to handle business accountancy, once the business begins to grow in size, revenue and profits. If you don’t know much about bookkeeping and the British taxation system’s latest clauses, that is when finding and hiring an accounting service makes perfect sense.
It is significantly more reliable and cheaper to trust a group of experienced accounting professionals, than to hire additional accountants of your own. In fact, if you already have someone looking after the accounts but the work is proving too much for them to handle alone, this may go even smoother. Your present accountant will be able to delegate extra work, while simultaneously aiding the newly hired accounting service in maximising the company’s financial potentials.
When You are Worried about Financial Compliance
Ideally, you should have a chartered accountant working on your tax records and reports, well before you are given a reason to be worried about the HMRC. It is okay if you are struggling with tax compliance factors after seeing a significant increase in the company’s revenue, but you should hire an accounting service to help sort out the company’s financials before things get out of hand.
When You are Writing a Business Plan
It’s a bad idea to write your business plan without availing the financial expertise of a certified business accountant, especially while writing about the company’s financial goals and projections. An accountant’s calculated, approximation inputs will make them more grounded in facts and numbers. This, in turn, makes it easier to get bank loans and find investors.
Banks have their own expert accountants to check the viability of granting a business loan, so predictive financial reports are preferred by them, when they are realistic. This makes your entire business plan more genuine and your business loan request more credible to lenders in general. Just make sure that the accountant you hire is a certified CA with a good reputation.
When You are being Audited
If you are being audited by the government, that’s a cause for concern. It might be just a simple misunderstanding, or it could be brought on by a major violation. The bottom-line is that you should immediately contact an accountant and ask for his/her assistance in preparing for the audit. By default, all CAs are trained to help their clients with audits. As always, precaution is the best way to avoid even being in such situations, so hire one before you are called for an audit.
Keep in mind that experienced accountants can and will help you with forming and maintaining your company’s legal infrastructure if you need the help, but that is not their prime job. It is better to hire a business lawyer for helping you with that part, rather than an accountant. However, if you do not yet have the budget to afford them both, rest assured that most reputed accounting services have their own legal experts. Therefore, they may also be able to guide their client’s company away from common legal compliance violations.