Updated: Oct 18, 2019
Every company needs some degree of financial management in order to be successful. If you’re a business without any in-house finance resource you may decide to outsource everything to your accountant. A good accountant can be a huge benefit, especially when it comes to tax and compliance issues, but it’s important to understand their strengths and where you might need to consider alternatives.
Year End Accounts & Corporation Tax Calculation
Accountants are experts in this field. This is their bread and butter - they will prepare and file all the necessary paperwork at Companies House and HMRC. They’ll correct errors and look out for any problems to make sure your ledger balances. A good accountant will also strive to help you reduce your corporation tax bill so that you aren’t paying more than you should.
VAT returns are relatively simple to process and submit nowadays thanks to advances in online software like Xero. Returns still require some attention and effort to make sure they don’t contain errors, however, and your time is valuable and better spent elsewhere. Letting your accountant take responsibility for your quarterly VAT returns leaves you with one less thing to worry about.
Personal Tax Returns
As a director you’ll want to make sure you are as tax efficient as possible and the best way to do this is to get an accountant to do your yearly tax returns. With years of experience and knowledge they are much better placed than you are to do this, not to mention all the time you’ll save.
Payroll costs are typically low so it’s a no brainer to utilise your accountant (or specialist payroll bureau) for this. They have access to up to date compliance information to ensure you are following correct procedure.
You may think you don’t need to run reports or that you are too small to require planning because everything is working fine without it. The problem is, without reporting and reviewing the results you run the risk of being blind to mistakes and repeating them without knowing it, slowing your path to success.
Accountants are no strangers to management accounts but they generally offer stationary, aesthetically unattractive and retrospective reporting at month/year end.
Meaningful reporting can demystify data for you and radically improve your business. Measure performance and take control of the success of your business with one of our reporting solutions such as Remote CFO Reporting.
Expert Guidance to Increase Performance
Accountants generally work for many different companies in several different industries. Because of this, their advice can often provide only generic insights that are not aligned with your business. If you are relying on your accountant to proactively guide your business growth, you may be disappointed.
We are Agency specialists; it’s the only thing we do. We offer guidance tailored to your Agency with practical solutions on how to move forwards, like our Profit Improvement Programme.
Planning for the Future
You may not have access to a crystal ball but you can make sure you have a robust forecast for all of your confirmed future revenue and a pipeline for your possibles. This is the only reliable way to predict the future path of your Agency. It is your responsibility to maintain your revenue forecast and your accountant can’t help here. Make sure yours is up the job with our Agency Health Check.
The longevity and success of your Agency relies on how you react to any given emergency and a robust revenue forecast means you’ll be able to react quickly if the worst happens. You may have known your accountant for a long time but that doesn’t necessarily mean they know what advice to give should your Agency hit a crisis.
Having clarity about costs and your breakeven point is essential to your recovery and a scenario planner like our Crisis Management Planner can help you do this quickly.
Great accountants are worth their weight in gold. If you are outsourcing your year end, payroll and VAT returns with no in house financial management, yet expecting your accountant to tell you where you’re going wrong, you could be leaving the success of your business to chance.