Most entrepreneurs are unsure whether they should hire an accountant in the early stages of their business.
Overheads are probably already stretched thin enough without having to worry about another expense. However, many new business owners may be unaware that hiring an accountant isn't just a mere expense, it’s an investment. There are online accounting services that can provide a great of financial support and guidance to the new venture.
When running a business, it can be tempting to delegate accounting to someone else rather than spending time trying to make sense of the numbers — but it's worth considering whether delegating control to someone else is preferable to understanding everything yourself.
It goes without saying that staying on top of your finances will save you a lot of time and stress in the long run, so it's worth taking the time to think about your options. Accountants can save you hours of weekly activities that you could spend developing your business. So, when you think of it, the small fee you would be paying your accountant will save you so much time and money on the long run.
Because startups are unpredictable, access to accurate financial information is critical for quick analyses that can identify opportunities for improvement and growth as well as provide strategic decision-making insights. Most modern accountants, like the Elena Meskhi & Co team, have decades of collective experience that can help startups to grow, obtain funding, and remain compliant in the process.
Accounting is the process by which your company records, organises, and comprehends its financial data. Accounting processes include using financial statements to report, summarise, analyse, and project business transactions.
Financial statements provide an accurate picture of your startup's level of success and financial health by providing a concise summary of your financial transactions over a specified accounting period and illustrating your startup's cash flow and operations status.
With everything else on your mind, the last thing you want to do is waste time crunching numbers and filing paperwork.
Not only that, but finance can be a daunting concept for many people, let alone someone starting their own business. Because you'd rather focus on the day-to-day operations of your business, it's easy to put account management on the back burner.
Many entrepreneurs don't think twice about keeping receipts and recording transactions, only to find themselves in a panic later on when they need to submit data to HMRC. Accounting, on the other hand, is an essential part of running any new business, and it's necessary not to underestimate how important keeping your books is for the future.
Here's why it's critical:
-You can keep track of your income and expenses.
-You have organised your receipts and expenses so that you can easily file a tax return.
-You'll have a record of vital financial information for future reference.
-You can ensure that everyone who works for you is properly compensated.
-It will be simpler to prepare financial reports such as budgets and balance sheets.
-You can detect mistakes and avoid theft or fraud.
-You will easily make informed business decisions.
Although 42% of new businesses fail due to a lack of a market for their services or products, 23% fail due to financial constraints. Unfortunately, even the best services and products on the market can fail because they are not properly managing their funds and making ineffective financial decisions.
You may decide that hiring an accountant is too early, but it is never too early to ensure that financial processes and systems are in place to prevent your business's cash flow from drying up, as well as to save yourself stress in the future. The last thing you want at the end of the year is to be handed a large, unexpected tax bill because you didn't keep track of your finances.
If you believe you may require assistance, the answer is that you most likely do. It's far better to get the accounting help you need early on so you don't have to clean up your messed-up finances later on.
You may have taken care of the fundamentals, such as opening a business bank account, filing receipts, and putting in place some simple systems, but finances can quickly become complicated. Making sense of your numbers can be difficult if you are not mathematically inclined, and it can appear to be a real chore if you are.
When keeping a record of your accounts, you may want to consider the following:
-When and how to prepare and file your financial statements.
-When you must complete and file your tax return.
-Whether you are eligible for any business tax breaks.
-Whether or not you keep accurate records.
-When and how you pay your taxes.
-If your cash flow projections and forecasts are accurate.
-Whether or not VAT is applicable.
-How to run the payroll.
-Any governmental funds you are eligible for in your industry.
You can ensure that you are legally compliant by taking care to implement things like this on a regular basis; however, this can be time-consuming and stressful when you don’t have the financial background. Not only that, but getting it wrong could result in significant fines for noncompliance. A large fine from HMRC is the last thing any founder wants; fortunately, it is easily avoidable with outsourced accounting services.
With the average UK accountant charging around £35 per hour for basic services such as a tax return and more than £150 per hour for specialist services such as tax planning, it can be difficult to justify hiring a bookkeeper when you're just getting started. Which is why we recommend you purchase accounting packages where prices will always be fixed. In addition to the obvious financial advantages to purchasing accounting packages suitable for the size of your business, your accountants at Elena Meskhi & Co could also help you with:
-Getting complete control over your finances through detailed monthly reports.
-Get quick access to your accountant for your urgent questions and concerns (at Elena Meskhi & Co we are known for our quick response times).
-We provide readable monthly reports that make it easy for you to make informed decisions.
-You have real-time data access at your fingertips through the use of the latest accounting software (part of the accounting packages).
-You will receive tailored consultation services based on your company size, business needs, and goals.
The success test will help you know how well your business is doing and what you can do to improve its performance. This test was developed by Elena, our CEO, in her book: Rewire Your Business for Success.
Get in touch with us to learn more about how we can help you:
Book a discovery call to speak to our CEO or lead accountant at Elena Meskhi & Co.
Purchase our accounting services straight from our website.
Contact us for any business enquiries or consultations.