Many small business owners prefer doing their own accounting, thinking they can save money and have good control over their business’s financial aspects at the same time. While basic bookkeeping may seem relatively easy to do, there are many reasons why small business owners are better off engaging the services of accounting and bookkeeping firms. Here are the most important benefits business owners can gain from choosing professional accounting services for their small businesses:
1. Avoiding accounting mistakes that impact your bottom line
When starting your small business, it might take a while to understand and become familiar with the rules and legislation regarding accounting and tax in the UK. This is why it is always a good idea to seek professional accounting advice from the outset. Mistakes such as misclassifying expenses, not keeping a good record of receipts or not reconciling your books with your bank statements can cost your business significantly by the end of the financial year, and it can all be avoided with the help of an accountant.
Accounting professionals can help you save both time and money by keeping accurate and consistent records of your expenses and transactions, correctly inputting and keeping track of all invoices and bills in affordable accounting software, advising on deductible costs and expense claims available to small businesses and keeping a tidy paper trail of your accounting documents.
2. Timely and efficient bookkeeping and statutory accounts
Keeping timely, accurate bookkeeping records for your small business is not only mandatory but makes a sound business practice, allowing any owner to have visibility over their business’s profit and cash. Having your accounts updated on a monthly or quarterly basis is the best way to achieve this kind of visibility and keeps all your paperwork in good order, before it turns into an accounting nightmare.
This is where making use of professional accounting services proves to be extremely valuable, as they ensure your business’s bookkeeping is done efficiently and in a timely manner. Most small business accounting specialists will assist you in collecting all your business’s bookkeeping records on a monthly basis and quickly produce the yearly statutory accounts, including calculations of your corporation tax liability, at the end of the financial year. This timely accounting procedure will allow you to efficiently plan next year’s budget and cashflow forecasts.
3. Saving precious time that you can use to focus on your core business
Done properly, bookkeeping can be quite a time-consuming activity. It accounts for up to 20% of the working hours in the case of a small business owner, and this percentage can go up if you take into consideration other related tasks such as filing tax returns and payroll.
Contracting the services of accounting companies has the benefit of alleviating small business owners of this somewhat distracting admin work, allowing them to spend more time on growing their business operations, meeting more clients or marketing their business. Even when bookkeeping records are kept in-house, small business accounting companies often offer valuable support by providing templates that help business owners organise their day to day finances, access to streamlined online accounts portals and accounting advice in real time.
4. Drawing business advice from your statutory accounts
But maybe the most important reason why you should hire external accounting services for your small business is the wealth of financial knowhow and business advice you will have access to.
Top accounting companies provide more than just bookkeeping and admin support for keeping your paperwork in good order. Accounting specialists can help you understand the difference between cash flow and profits and how to read your statutory accounts in a way that helps you better prepare your small business for future growth; they are able to closely monitor key indicators in your business’s financial activity such as trade debtors, trade creditors, payments and cash flow, and advise on the best strategies to secure the financial health of your small business on the medium and long term.