While there is no legal requirement for limited companies to employ an accountant to look after their affairs, there are a number of reasons why the vast majority of limited company owners opt to use accountants instead of taking charge of their own record keeping and tax affairs.
An accountant can be relied upon to add considerable value to your business; preventing errors, ensuring accurate year-end statutory accounts and reviewing potential tax savings.
So what are the biggest advantages of putting your faith in an accountant to take care of your firm’s financial duties?
Accurate record keeping
Engaging an accountant to take care of bookkeeping isn’t always viable for small firms, but as your business grows you may have the budget to sign up with a local accountant to take charge of the more complicated tasks.
Firms that don’t feel confident enough to maintain their financial records should consider an accountant to monitor cash books, sales and purchase ledgers, and wages detailing salary payments and National Insurance contributions (NICs). Even if you don’t employ staff, as a Director of your own company you may still be considered an employer by HMRC so there are always reporting obligations to fulfil.
Easy to use online accounting software can help make record keeping and raising invoices more manageable and your accountant can recommend the most cost effective and suitable software for you.
Efficient accountancy practices also benefit limited companies by being able to manage and control finances and plan for future growth, without impacting on the human resources of the business. Thus allowing your staff and you to focus on what you do best.
Potential tax savings
Companies looking to make tax savings without wishing to attempt to interpret detailed tax legislation should seek professional advice. Tax planning reviews are very useful to ensure you only pay as much tax as you are legally obliged to and no more.
Whether you are loaning funds to an employee, wishing to claim for capital gains, valuing stock or even recovering VAT, an accountant can provide general guidance on the numerous tax saving strategies available to you.
You may require an accountant to help you meet the statutory obligation to file annual returns and accounts at Companies House within the filing deadlines. An accountant will also be able to help company directors with self-assessment tax returns and corporation tax returns to ensure you are up-to-date with the relevant forms at the tax office. An accountant will also be able to alert you to any tax payments due and when they should be paid to HMRC.
Focused on business growth
If you are looking to take your company to the next level a good business plan with sound financial information is required to make your dreams a reality. Most businesses need to know if an idea is viable and an accountant can also help plot a course to ensure banks and other lenders are on board with your proposals.
You should subsequently seek an accountant for assistance as they should know exactly what financial information is required and how it can be presented; thus giving you a better chance of success in securing much-needed funding.
Experienced accountants will also be well versed in the preparation of cash flow forecasts, budgets and business plan for limited companies looking to plan ahead.
A cash flow forecast is an essential management tool as it indicates the long term liquidity of the business and outlines how much additional investment is required to drive the company forward. Most lenders will require this and it can be very difficult and time consuming to create such accurate and comprehensive reports yourself.
It is not always an easy decision to outsource the financial administration that goes with running a successful limited company.
However, at TaxAssist Accountants our personal service means you can meet with your local TaxAssist accountant who will determine exactly how we can help your business and you free of charge, with no obligation to use our services after this discussion.
We are happy to discuss your individual requirements and undertake a full review thus enabling you to decide on the best way forward for your company. We take pride in being different from other accountants and are happy to act as business advisors in order to help you grow your business.
By Jo Nockels FCCA – Training and Communications Managers at TaxAssist Accountants
TaxAssist Accountants is the UK’s largest network providing tax and accountancy advice and services specifically for small businesses. For a free initial consultation with your local TaxAssist Accountant, please visit: