Small business owners and even some high-earning individuals tend to skip hiring an accountant, thinking that they can save money handling their finances independently. It may be true to some extent because you will indeed save a few hundreds of pounds a year on retainer fees if you don’t get an accountant.
However, what you don’t realise is that the savings you enjoy for not hiring such a professional are just a pittance compared to what you could save if you hire the services of one. Here are the ways accountants can help you keep your hard-earned dough under your name or, even better, earn you some more.
1) Free Up Your Time
For most business owners and working professionals, there’s a grain of truth to the saying, ‘time is gold.’ You see, the more time you free up from doing your bookkeeping, taxes, and financial statements, the more time you can concentrate on money-making endeavours that your business needs to succeed. Why would you waste time learning and studying taxation and accounting when hiring professionals, like Page Kirk accountants in Nottingham, would save you more time?
Again, it’s more advantageous for you to spend your valuable time on the things you do best, such as running your business or practicing your profession, rather than learning some do-it-yourself accounting. In short, hiring an accountant is one situation where you spend money to enable you to earn so much more.
2) Maximise All Your Tax Deductions
Do you know why large corporations like Facebook and Amazon can avoid paying massive taxes legally? No, it’s not because they cheat or pay off the authorities.
Big companies can get away with paying fewer taxes because they hire accountants and tax professionals to do their tax returns. Even if you are a high-earning professional employee or a small business owner, it pays to hire an accountant because they will help you find ways to save on your taxes by maximising the deductions you are entitled under the law.
For example, in 2020, some states or countries have passed laws to help ease the tax burdens on business owners and individuals affected by the pandemic. You may not be aware of this, but surely accountants and tax professionals make it their business to understand and apply these provisions whenever possible to help their clients save money on taxes.
3) Find Ways for You to Avoid Penalties
There are penalties and charges that you need to pay for late tax payments or incorrect income tax filing. Although you should not view the U.S. Internal Revenue Service (or Her Majesty’s Revenue and Customs office in the U.K.) as a monster who takes pleasure in slapping on penalties here and there, such an institution is nevertheless strict. It will enforce tax laws that penalise errors, negligence, or fraud. You need all the help to ensure that you’re filing timely and correct taxes. An accountant is the right person for the job.
Besides, even if you use online tax software, there’s still a possibility for errors because you still have to key in the correct numbers and date in the online tax return. If errors occur, you might be surprised to get a letter from the IRS asking you to pay a massive penalty.
4) Help Show You the State of Your Finances
If your books are in disarray, it’s hard to ascertain your liquidity and the state of your finances. With the help of an accountant, you’re able to straighten your books. You will discover how much money is coming into your coffers and how much is going out. The data you gather using your accountant’s up-to-date recordkeeping will help you realise where you can cut down expenses to save more money which, in turn, you can use to invest in more money-generating projects.
5) Assist in Securing Money
On top of helping you save money, your accountant can help secure financing or loans from banks and other financial institutions. If you plan to open a small business, you need a business plan to secure a loan. If you don’t know how to make cash flow, balance sheet, and income statement projections, you may not be able to convince your bank to lend you the money you need.
With an accountant’s assistance, you will find ways to lower expenses, thereby saving money you need to allocate capital expenditures. The same professional also knows how to create all the financial statements you need for your business plan. A well-crafted business plan will show lenders that you are serious and meticulous in handling money matters, so they will be more inclined to approve the loan you need to open your business.
6) Offer Business Guidance
There’s no guarantee that you’ll rake in tons of money from your business investments. Even if opening a business can be a trial-and-error venture, you can increase your chances of succeeding if you play your cards right. With the help of an accountant, especially the one specialising in business planning, you’ll be able to find areas where you can save on expenses to boost your profits.
Many business owners also don’t realise that selling products and services is not the only thing they need to succeed. If you want to ensure your business’s long life, you also need to sell your products and services at the correct price levels.
For instance, if you offer your services or sell your products with minimal margins, your income may not be enough to cover business-related expenses such as rent, salary, equipment, raw materials, and transportation, among other things. Your accountant should know a lot about costing and lend you a hand in coming up with the correct prices for your products and services.
7) Suggest Investment Alternatives
Besides providing you guidance on managing your business, an accountant can help you understand different investment options you can take to grow your money. Accountants can explain to you the stock market’s ins and outs, money markets, real estate investing, and even new investment vehicles such as cryptocurrencies.
The Bottom Line
Many people, particularly small and medium-sized enterprise owners, believe that they can save money by not hiring an accounting firm’s services. They don’t realise that they can lose a lot more than retainer expenses if they choose not to have an accountant. Your accountant will free up your time, maximise your tax deductions, organise your books, and help you formulate correct pricing for your goods.