An accountant is a person, who is qualified in recording and keeping business transactions of an organisation, gives statements about finances to the management and issues a report on how the organisation is performing. On why one should have an accountant depends on the stage your company has grown. Below are reasons why one may need an accountant and why he may not need one;
- Writing a Business Plan
An accountant is essential at this stage because he is knowledgeable in using accounting software to deal with some projections in your finances and similar reports in investments. Your business will succeed depending on how realistic and professional your business plan is set, and the accountant is vital in making it succeed.
- Advising About Legal Structure of Your Company
Different businesses have different business legal structures, and an accountant can help you through in understanding some of these legal structures and choosing which is best for you. For example, you should realise legal structures that are there in limited liability partnership, limited companies, sole trader or sole proprietorship, corporations etc. Accounts for limited companies are somehow complex to handle, and it requires an expert, an accountant. They are also familiar with different tax laws and will advise you in decision making.
- In Helping You with Your Finances
An accountant is necessary for managing your finances in your business especially when you don’t have a track of your money circulation and when you and their debtors are unable to know who owes you and how much. He also helps in payrolls for your employees and balancing the company’s total revenues and employees’ salaries and other payments made in the company.
Other benefits of hiring an accountant are;
- He will advise you on deductions if there might arise and how you can differentiate between your expenditures from those of your business
- He analyses for you your financial statements at large for you to understand how your business is doing and plan better for the future of your business
- He can take you through an audit of your business if it is required and give you a piece of advice after that
- He will enable you to get enlisted in HMRC within the necessary time and pay for your company’s taxes correctly
- He will assist you in obtaining the required licences to run your business
An accountant can be hired on a short term basis depending on the scope of your business, especially for small scale businesses. Some opted in doing their accounting by using accounting software; however, some risks lie behind it. First of all, you won’t realise when you are making mistakes, and secondly, there might be a reduction in tax liabilities and allowances that you won’t be aware of.
Whether it is necessary one need an accountant or not lies in the hand of one who owns the business because he knows about his/her business. It is widely regarded that having the right accountant is the way to go because they will get into your business, guide you through and advise you on mistakes made and how to correct them.