When the scale of your business is small, you may want to wear multiple hats, undertaking the roles of everything from marketing to accounting and performing these functions yourself. However, when your company expands, the paperwork would inevitably increase, and it would not be feasible to execute everything yourself.
You may want to get help by adding to your headcount or engaging an accountant in the UK. By outsourcing this function, you get to free up some time to focus on your core business and grow your startup.
By the way, if you’ve already decided that you need an accountant and are looking for accounting services in the UK, we’ll help you with that routine paperwork and take the accounting paperwork off your hands so that you can grow your business. Otherwise, let’s delve deeper into what an accountant does and how to help a startup grow.
What Does An Accountant Do?
With accounting being a massive field, narrowing your accountant to someone with specialised knowledge is essential. Since there are different kinds of accountants, an accountant may be
specialised in a particular area. Someone with a degree in accounting or a certified public accountant licence may not necessarily be the best fit for your business.
When it comes to small business accounting, there are two types of accountants. The first is the public accountants, who work independently and may be contracted to small businesses or individuals to help with financial planning, including tax preparation.
There is also a management accountant, which could be the most critical for small business accounting since they work with businesses to streamline financial processes and records, advise strategy and planning, and produce data and reports.
3 Things To Consider When Choosing to Hire or Outsource Your Accountant
When it comes to managing your business's accounting, in-house and outsourced services differ in the workflow. How do you decide if you should hire a candidate to do your accounting in-house or simply outsource this service?
Here are three critical differences that in-house and outsourced accounting services can offer your company.
Having an in-house accountant means it is inevitable that your employee might not always be at his best performance throughout the day. Pantry conversations or social lunches are bound to happen, which means that you will still have to pay your employee even when he might not be working productively.
On the other hand, outsourcing means you will only be paying for the billable time spent on your company, so there will not be unnecessary expenditure spent on wasted hours.
The cost will be a key determining factor for many small and medium businesses. For instance, an in-house accountant costs upwards of £30,000 per year. Their salary will depend on accreditation, experience, and skills. It excludes overheads like hiring cost, working space, laptop, insurance, medical, company benefits, employee training, sick leave, and more.
On the flip side, outsourcing means not having to worry about incurring additional costs. The cost incurred from hiring an outsourced team is likely to be significantly less than employing an experienced accounting professional in-house. Moreover, there will be reduced recruitment costs and office space requirements. Depending on the services you require, outsourcing is significantly cheaper than hiring an in-house accountant, and you should still be able to enjoy some cost savings even if you engage top tier outsourced services.
Quality and Expertise
Employing someone in-house means that you will have to screen for a qualified candidate with a proven track record in this field and the necessary experience. This is a crucial process, as you might end up with a self-taught employee who could risk producing a low quality of work. Finding a specialist with the appropriate training and experience for your project might be difficult and takes 35 days on average. To save your time and efforts consider collaborating with a staff augmentation company. This approach will help access top talents and experts in the short term.
However, outsourcing means you will have a team of professionals with diverse industry expertise since they continually undergo training in accounting. With this outsourced team, the years of combined experience far surpasses the expertise of a single in-house employee. Furthermore, you can save precious costs and time since it is unnecessary to train this team of professionals to hone the financial skills required for your small business.
5 Telltale Signs That You Should Outsource Your Accounting
As a small business owner, you will always have a long list of things to do, and more things to add to the list. Keep your current situation in mind and decide whether you should seek extra help.
Here are 5 telltale signs that you should outsource your accounting:
- The thought of taking on overhead costs and managing another employee sounds like a chore.
- Accounting takes up too much of your time, and you find it difficult to answer questions from auditors.
- You struggle with maintaining adequate books and records
- Your company does not have an internal accounting function at the moment
- You don’t have an accounting system in place due to a lack of resources
What Can An Accountant Help With In My Business?
Why not spare yourself the headache by outsourcing accounting tasks? Leave it at the hands of an expert? What’s more, there will always be someone reliable for you to turn to if you require advice.
When it comes to tax season, small business owners like yourself can be facing tremendous stress. This is when your accountant comes into play. With your accounting being appropriately done throughout the year, your life during tax season will be much easier. You can also have a better idea of how your business is doing financially.
Every company in the United Kingdom must maintain their books and manage their financial data properly, with information updated per the HM Revenue and Customs (HMRC) requirements.
Corporate tax filing can often be a taxing and time-consuming process, but with the help of your accountant, you can be relieved of all this paperwork and have peace of mind knowing that they will follow the proper procedures. When planning your tax strategies, you can even get tips and suggestions on an allowance! In this way, you don’t have to worry about missing out on tax relief or non-compliance.
Have more of your time and energy back to focus on other key business aspects
If you manage your daily accounting operations, you will soon find yourself investing too much effort and time into ensuring your accounting system runs smoothly, from paying invoices, issuing, maintaining cash flow, preparing financial statements to processing payroll.
Instead of getting frustrated over work that is not core to your business activities, outsourcing means you will have your energy and time back, so you can focus on growing your business. With extra help in your accounting, you can be assured that your company's financial details will be organised with nothing overlooked.
Seamless audit process
In accordance with HMRC, it is mandatory for all companies in the United Kingdom to file an annual return (AR). Failing to do so may get you in trouble with the law.
With your accounting outsourced, you can get help in preparing your financial statements so you can rest easy. These accounting experts can be your company’s point of contact with the auditors and take care of the complicated accounting matters. During the audit process, auditors will scrutinise your company’s financial statements to make sure they are in line with Accounting Standards. If these financial statements are well prepared, it is highly likely that your audit will proceed smoothly.
Experts for you to consult when you are looking for advice
Operating a business means having to make difficult decisions. At times when you’re looking for advice, you can be assured there will always be experts that have your back.
For instance, when you are registering your company, you might struggle with the different legal structures available. Whether your business is best suited for the limited companies, limited liability partnerships, sole traders or proprietors model, you may want to seek an accountant's opinion on the legal business structures available so you can decide what works best for your company.
When your business grows, you can also get your accounting firm to examine your contracts so you can make better decisions with greater confidence.
Better business cash flow
Cash flow management is of utmost priority to any business owner.
Many profitable businesses flop because they run out of money at the wrong time and are unable to pay their staff or suppliers. Even the most profitable business will not be able to last long if their expenditure is too high, or if payments stream in slowly. Accountants are aware that a company’s revenue ebbs and flows, and the same goes for expenditure. As such, accountants can help you predict the effect on your cash flow, identify if there’s a shortfall of working cash flow and take precautions to ensure an optimal amount of money available today or nine months from now. This will make payday a lot less stressful, and improve your supplier relations as well.
Concentrate On Your Business And Leave The Rest To Us
We know how challenging it can be to run a business, but we are here to help. It is not always easy to stay on top of things with so much going on. Fret not and leave the pesky paperwork to us.
Free yourself from the admin work and let us handle your company's accounting, taxes and reports. We take over paperwork, cross-check data, and submit your annual reports neatly. You will also have advice from experienced accountants who know e-commerce businesses to help pay tax efficiently.