DIY accountancy software is easy to use, but it isn’t always the best solution for entrepreneurs. Just as owning a licence for Microsoft Word does not make you a writer, owning accounting software does not automatically make you an accountant.
The software will only do what you tell it to and a good accountant doesn’t just balance the books. A good accountant is effectively your business’s financial partner. They understand the nuances of your company and have an intimate knowledge on everything from your outgoings to future financial goals to the wider tax and legislative space.
The simple answer to the question “do successful entrepreneurs hire accountants?” is yes. Successful entrepreneurs understand their area of expertise and know when to hire in the experts for a wide range of business tasks.
Accountants can be an invaluable asset to your business. Here are four general areas of expertise they can offer:
1. Business Advice
An accountant is not just knowledgeable about your business’s financial affairs, they also have a wide knowledge base of the accounting and business world. From business plans to insurance to expansion, an accountant gives entrepreneurs a new level of insight from an outside, specialist perspective.
2. Accounting and Bookkeeping
This may be the most basic accounting discipline, but all business owners need to keep up-to-date records and books. An accountant will set up bookkeeping and accounting systems. Alternatively, some services also offer an online portal to access these systems, such as the Nixon Williams Vantage service.
A good system will evaluate and clearly show you the business’s profitability at any time and modify calculations such as retained profit, unpaid invoices and expenses based on your input. It will also help you to evaluate your business performance by, for example, letting you track expenses and set budgets.
3. Tax Advice
An accountant can offer advice on tax compliance, which keeps your business in line with the tax laws, and tax planning to reduce your overall tax burden. The tax and legislative landscapes are constantly changing and having an expert on hand to maximise your take home pay within the current rules and regulations can be worth its weight in gold.
Auditing services may be required for a number of different reasons, but the most common is as a condition for a bank loan. Audits can take place on many different levels, from preparing simple financial statements to a full audit, where an accountant or third party assures another body that the business’s financial information is accurate.
How to choose an Accountant
Select accountants that have a degree of familiarity with your business sector and take onboard personal recommendations. Also, look at the services on offer and assess which firms are a good fit for your company.
Once you have an idea of your expectations, interview the shortlisted firms to find out the services on offer, fees charged and whether they work in a style compatible to your own. Looking through your chosen accountant sites for testimonials will further add credibility to your final choice.
The extra insight, guidance and expertise accountants can offer entrepreneurs is often the catalyst to make your business thrive - and they free you from staring at an Excel spreadsheet to spend time and energy on your area of expertise - your business.