There are various costs associated with starting a new business and because of this, some small business chooses to manage the accounting side of their business themselves to save money. However, this can be a false economy as having an expert accountants in UK is vital to the success of a fledgling enterprise.
Poorly managed finances are one of the main reasons small businesses fail before they’ve had a chance to get properly established. As small businesses often have limited funds, making sure the finances are in good shape helps businesses grow and develop in a sustainable way.
Accounting is also vitally important for owners of small businesses as it helps the relevant stakeholders such as owners, managers, and investors assess how the business is doing. Having an accounting service on hand means easy access to important information about cost and earnings, profit and loss, liabilities and assets for decision making, planning and controlling processes within a business.
Small businesses need an accountant to record financial transactions carefully and accurately, and even more importantly so that businesses adhere to the letter of the law in terms of tax reporting agencies require you to keep books at a minimum level that tracks income and expenditure.
Anyone who runs a business needs to be well aware of the following reasons as to why they need to focus on this area to avoid common potential pitfalls:
Reliable record keeping
Accounting means you monitor the cash flow of the business and to ensure your business stays afloat. You will need to keep and store records efficiently and come up with financial strategies to help your business.
Small business owners often rely on cost accounting which explains fixed costs and variable costs. This can help you avoid losing money on a project you thought would be lucrative as it helps you understand how to accurately cost your project.
Business health check
Accounting gives you a better understanding of how your business is doing financially. One way of doing this is to learn to read a balance sheet, income statement, and cash flow statement
Avoid potential problems
Accounting helps you detect and avoid frauds and theft by customers, employees and suppliers. Also, when you understand in detail your business finances and transactions you’re in a better position to handle audits. Additionally, you’ll have more favourable dealings with bankers as they respond well to business owners who have a grasp on their businesses finances and actually understand financial issues.
Why hire an accountant?
If it’s possible to handle the accounting side of your business yourself then why outsource it? However, finances can be time-consuming and complicated and may need a trained expert to handle them properly. Professional accountants in UK help business owners make informed financial decisions whilst maintaining rigorous compliance standards.
Whether you are just starting out, or whether you have staff, the key to developing your small business is to review your finances regularly and keep a detailed budget that will allow you to find ways of saving which can make a big difference in the long run.
Accounting involves a huge amount of data collection and organization of information which can mean that many business owners simply don’t have the time to do this themselves.
Here are just some of the reasons you might want to invest in an accountant for your small business:
They can analyse the financial data and suggest areas for improvement which is essential for the long-term health of any business.
Take care of the paperwork
Prepare financial statements based on the Generally Accepted Accounting Principles (GAAP) It helps you during tax season as accountants can identify potential deductions and help avoid audits.
You will get personalised advice based on your business’s specific needs. Having an accountant as your financial advisor also helps you with budgeting and monitoring cash flow on a regular basis. This means you can avoid any potential problems and deal with any that occur quickly and effectively.
Using a third-party accountant means you’ll receive the objective impartial data you need to inform your decision-making process.
When it comes to hiring an accountants in UK you want to go for one of the best. BNA consulting provide expert accounting and bookkeeping services in London to businesses of all sizes. Contact us today to see how we can help your small business grow.