Do I really need an accountant?
15th Feb 2019
A lot of people are realising that running their own business can be very rewarding. In fact, according to the Federation of Small Businesses (FSB), in 2017 there were a staggering 5.7 million privately-owned small businesses in the UK.
In the beginning, you may feel it’s not necessary to hire an accountant, opting to do it yourself. As your circumstances change and your businesses’ financial affairs become more time-consuming or complex, you will have to decide if you want to continue managing it yourself or pass it onto the expert hands of an Accountant.
“Success is never guaranteed”
No matter how much hard work and long hours you put into your business, failure can easily creep up on you. The online publication, Smallbusiness, states that 91% of businesses survive their first year, but after five years just four in ten businesses will still be trading.
There are several reasons why these businesses fail. Engaging with an Accountant can help you plan for success and minimise the risk of failure, by giving support and guidance on things like:
Business structure
When starting a business, you have the option to form it in four different ways:
- Sole trader
- Partnership
- Limited Company
- Limited Liability Partnership (LLP)
Each structure comes with different responsibilities and varying levels of personal liability. An Accountant will look at your current circumstances and assess your business’s growth potential and advise on which structure will work best for you.
To understand the differences of each structure, give us a call on 0845 880 5678, or email website@wrightvigar.co.uk.
Preparing a business plan
Preparation in business is key to success. An important element for preparing for the future is having a robust business plan. A business plan helps you lay out your goals for the future and details steps on how you are going to achieve them.
An Accountant can assist you in preparing a business plan. Specifically, they can review your business idea and evaluate its profit potential. Additionally, they can assist you with setting realistic financial targets, preparing budgets and advise if your business is doing as well as it was hoped by comparing forecast figures with actual results. If it’s found that your business hasn’t achieved the results expected, the accountant can offer guidance on business strategy including increasing sales, cost-savings measures and other areas where improvements can be made.
Raising finance
Most businesses need finance to get going and to grow. There are several ways you can finance a business. Options include; self-funding, borrowing money from investors or friends and family, forming a partnership or joint venture, crowdfunding, obtaining an overdraft or bank loan, or through introducing capital from a personal loan or mortgage.
An Accountant (like ourselves) will understand what is required to grow your business and be able to offer guidance on the best way to raise finance.
If it’s decided that the best way to raise finance is through applying for an overdraft or bank loan, having a comprehensive business plan ready to present to the bank is vital. A bank or other lending provider will not usually lend you money without seeing evidence that you will be able to keep up with repayments.
To discuss your finance needs with our team of experienced professionals, give us a call on 0845 880 5678.
Tax planning
The UK has very complicated tax systems. For instance, HMRC’s guide on expenses is approximately 100 pages long. If you choose to manage your business’s financial and tax affairs on your own, can you imagine how much time you will spend trying to understand the rules and regulations governing the different tax allowances and reliefs?
An Accountant can save you the hours you would have spent on calculating your tax, allowing you to spend them on growing your business. The accountant will work with you to understand your personal and business tax position and create a plan to utilise the available tax allowances and reliefs to manage your tax liabilities.
At Wright Vigar we have a specialist team of tax advisors who work with thousands of businesses across the UK from our offices in Lincoln, Gainsborough, Newark, Retford, Sleaford and London. To find out how we can support your business, get in touch with us on 0845 880 5678 or email us on website@wrightvigar.co.uk.
