Everyone running a business knows that the financial management of that said business is essential for profitability and liquidity. Big or small, proper money management empowers organisations to do more and go further. Yet, for many, a business accountant is considered a nice-to-have rather than a necessity.
If you’ve always been happy with your earnings and the results of your tax returns, what you know may seem like all you need. But there could be more to gain.
Business accounting is varied, and the needs of each business will naturally be different. It pays to understand at what stage certain services may provide value beyond the status quo.
The role of a chartered certified accountant
Business accountants come in all different shapes and sizes, but most B2B specialist firms will have capabilities to support you with your accounts, tax returns, payroll, bookkeeping, analysis, expansion and compliance. Whether you need all or just some of these will depend on your business’s size and financial complexity.
Below we will look at the various functions of a business accountant, unpacking the value of that service and which businesses can benefit.
Tax and VAT services
Business type: All
Taxes are an inescapable reality for every business. There’s no way around them, but experts can reduce the sting. Business accountants know all the ins and outs to get you the best results on your tax claims.
Depending on your internal accounting capabilities, your tax accountant may simply step in at tax time to process your return, or you may need a more hands-on service helping you to gather the right information before you’re ready to lodge.
In any case, tax and vat specialists should always be engaged come tax time. The same is true for any small business that reaches more than £85,000 annual turnover, needing to register for VAT with HM Revenue and Customs (HMRC). Taxation responsibilities should be taken seriously, as mistakes can be costly.
When to engage
While tax time seems the obvious time to engage a business accountant for taxation services, it can be worthwhile to look to engage someone sooner. Engaging a business accountant at the moment your tax return is just a bit too late to get great advice that could get you better results that tax year.
For example, engaging a business accountant a month or two before the tax year has closed (possibly booking them earlier than that as this is a busy period for accountants) gives them ample time to offer advice before the tax year has closed. Buying new computers or trying to slow your income in the last month could have huge impacts on your final return. The advice from your accountant is even more valuable than their ability to lodge the claim.
Bookkeeping and accounting
Business type: VAT registered businesses
Once your business has reached a size where there is a reasonable flow of accounts receivable and payable, it is wise to bring on a business accountant for bookkeeping and general accounting.
In growing businesses still at the smaller scale, these tasks often lay on the shoulders of reception or management. Bringing a third party in to help with bookkeeping and accounting services helps free up those staff and ensure that year-end accounts are accurate and prepared on time.
When to engage
Bookkeeping and accounting are year-round tasks, best managed consistently rather than catching up every quarter or year. Working with a business accounting firm, you can collaboratively design a solution that suits your needs. Perhaps you need someone reviewing the bookkeeping and accounts every week, or perhaps it’s every month. Your business accountant should be able to consult with you to advise on what is best.
Payroll, pensions and auto-enrolment
Business type: 5 staff or more
Payroll is quite straightforward in a small business, but the moment you grow beyond five staff, it can become tricky to manage payroll, pensions and onboarding of new staff. Staff take leave, they get sick, they may work hourly, or they may qualify for a bonus. As additional layers are added to the typical monthly pay, you will probably need some help to keep it on track.
Happy staff are properly paid staff. Effective payroll management is the peacekeeper ensuring that staff are happy and everything runs as it’s meant to.
A business accountant can help implement your payroll system or simply keep it running, including P11d and PAYE settlement agreements. They can advise and implement pension plans and set up auto-enrolment to make the onboarding process as smooth as possible.
When to engage
You want to bring on a payroll and pension specialist before it gets out of hand, rather than after some mistakes have been made. Once you realise that your payroll and pension is becoming more complex, it’s advised that you start looking at your options. Speak to business accountants, including us here at The MGroup, and discuss what we can do to ensure your staff payments go smoothly.
Beyond the basics
The benefits are obvious if you’re at a business stage with niche accounting requirements. Registered audits may arise, deep level forensic accounting may be required, or expert advice on business exits or expanding into new countries is invaluable for making the most informed business decisions.
Whatever your needs, whether you’re just setting up your VAT now or you’ve built an empire that you’re ready to exit and pass on, The MGroup boast a diverse team with a range of accounting specialities to support clients at any business stage.
Contact us today to discuss how we can help you maximise your investment in business accounting.