Setting up a business is a very exciting time, it's likely that you are investing lots of your time in marketing your product and servicing your customers but what about the financial side of things?
You probably know you will need to arrange a tax return at some point but why might you need an accountant from the beginning?
The simple answer is that most start-ups will need an accountant, as we have already mentioned at the very least you will need someone to complete your tax return but what about ongoing support?
When you are setting up a business there are lots of important financial decisions to be made and an experienced accountant can help guide you through these.
Peter O'Donnell, Maidstone accountant, says "Often a new company will be so focused on their product or own clients that finances fall by the wayside, this can seriously impact the business's goals. It's so important to have the right person working alongside your business to make sure everything is moving in the right direction"
Bookkeeping is the first place an accountant can help. They can set up your bookkeeping system from the start to ensure it is fit for purpose. This will save you time and money further down the line.
Bookkeeping involves recording all of the financial transactions made by your business, this will include sales, purchases, expenses, and receipts. An accountant can do this for you. Or, they can train you or your staff to do it yourselves using cloud-based applications such as Quickbooks or Xero.
As a small business owner, you might think that you don't need to record all of these transactions. However, it is important to keep on top of your bookkeeping from the start.
Not only will this make completing your tax return easier but it will also help you to track the financial performance of your business. Thus allowing you to make better decisions about where to invest your money.
If you are planning on employing people then you will need to set up a payroll system. This can be a difficult and time-consuming task, especially if you are not familiar with payroll legislation.
As an employer, you will need to be ensuring the correct national insurance is paid. Not to mention, any student loan repayments, tax, and pension contributions.
An accountant can help you to set up your payroll system. They'll also ensure you comply with all of the relevant legislation. Additionally, they can process your payroll on your behalf, taking away the stress of meeting deadlines and dealing with HMRC.
All businesses must submit a tax return to HMRC each year. This is a complex document and if you are not familiar with the tax system it can be very difficult to complete.
An accountant can help you to complete your tax return and make sure you are claiming all of the tax reliefs and allowances you can. They will also deal with HMRC on your behalf, so you don't need to worry about dealing with the taxman.
If you are an Ltd company then you might want to take some of your profits out of the business as dividends rather than salary. This can be a tax-efficient way of extracting money from your business. An accountant can help you to plan your dividends in the most tax-efficient way.
If your business is VAT registered then you will need to submit a return to HMRC each quarter.
An accountant can help you to complete your VAT return and make sure you are claiming all of the relevant VAT reliefs. They can also deal with HMRC on your behalf, so you don't need to worry about dealing with the taxman.
If you are an employer then you will need to set up a pension scheme. You must also adhere to auto-enrolment guidelines for all employees. This can be a complex task especially if you are not familiar with pension legislation.
An accountant can help you to set up your pension scheme. They can also process your payroll on your behalf, taking away the stress of meeting deadlines and dealing with HMRC.
If you decide to move over to an Ltd company then an accountant can help you. They'll know which company structure to choose and help register your company with Companies House.
As an Ltd company, you will need to file a confirmation statement with Companies House each year. An accountant can help you file this and make sure your information is up to date with Companies House each year.
In summary, an accountant can be a valuable asset for any start-up business. Helping with bookkeeping, payroll, tax returns, VAT returns, pensions, and company formations. They can also help you to plan your finances in the most tax-efficient way. If you are thinking of starting a business then it is worth speaking to an accountant. They can assist you with the financial side of your business so you can concentrate on your client, customers, or products.