For a lot of new or small businesses, hiring an accountant could be something that often gets put off, prefering instead to avoid the costs and manage the business finances internally. But is that always wise?
This short video looks at the value an accountant could add to your business, and how they could help it to become more successful.
While the number of people turning to being self-employed and having their own business is growing steadily, the down side of this is that more businesses fail. Sometimes it is a situation beyond the owner’s control and other times there are signs that the business is failing that the owner ignores. So how can you save a failing business and what should you do if it passes the point of no return?
Signs things aren’t going well
Being positive is an important point for anyone in business, especially when it is your own business. You need to be confident about what you are doing, upbeat and enthusiastic as this propels you forward and also rubs off on customers and business partners. But that doesn’t mean you should ignore the signs of problems when they surface or make yourself unable to spot them.
Declining customer numbers
One of the classic signs that there could be an issue is if you are losing customers. Maybe you had a book full when you started and some have naturally finished their interaction with you. But no new ones are appearing, the phone isn’t ringing or the emails aren’t appearing. This could mean there is a problem at some level of the business and you need to take steps to head this off. Look at customers who didn’t return – what was the reason? Why have leads from a certain source dried up? Answer these questions and you have a better chance of understanding if the problem is you or them.
Books aren’t balancing
Often a new business finds itself on uncertain financial ground but you need to ensure that there is the right cash flow in the business or you are quickly facing problems. If you are spending too much over your budget on costs each week, for example, then you need to take a long look at what is happening. Don’t be afraid to bring in outside help to get extra opinions such as a freelance accountant or bookkeeper, whose job it is to spot such problems.
Taking steps to deal with the problem
If you are watchful and aware of the problem, there are often more steps you can take to deal with the issue. A short-term loan or financial assistance package might be able to help re-balance those books and ensure the costs are under control. Or a new advertising campaign might help raise awareness of the business and working with a virtual assistant might be the way to help do more with your time to cover all those marketing avenues.
If the worst comes to the worst, don’t be afraid to get in touch with a company like Hudson Weir – insolvency practitioners. While it is sad that you might need to wrap up the business if it really is beyond hope, it is better to talk to a company like Hudson Weir in London or someone similar where you live than to end up having this forced onto you. And it can be surprising the measures such a company can come up with to help you salvage as much as you can from the business to then start afresh.
In our article on Self Employed Success we briefly looked at why using accountancy services was important to your business success. Here’s a little lighthearted release from the HRMC to give you a few ideas on what your accountant wouldn’t be adding to your tax return!
Without doubt, the biggest growth area in terms of employment types currently across the UK is that of the self-employed person. From freelancers to store owners, Uber drivers to builders, more people are now becoming their own boss than ever before. And many of them are making a success of it – in fact, a big success. But what are the secrets to self-employed success, regardless of your industry or area?
Do what you love
One of the biggest demotivating factors in any job is doing something you don’t enjoy or even hate. Many of us have been there – you take a job to get a wage or the job you took changes over time and you come to be unhappy, depressed and lethargic. Therefore, when considering going self-employed in any form, one of the most important considerations is to do something that you love.
Of course, this needs to be offset with the practical. You might want to become an author but this isn’t always a job you can jump straight into. Therefore, it is worth starting your business in a similar industry and work towards this goal – freelance writers are a prime example. You build up your portfolio of writing, make connections and establish yourself in your field then move towards being an author on the topic you love.
Sadly, businesses do fail and sometimes due to circumstances beyond the owner’s control. But one of the top reasons for failing businesses that could have been prevented is a lack of preparation, especially in areas such as tax and legal matters. Therefore, when you are building a business, it is important to put practises in place from the start to ensure success.
Accountancy is one of the big areas and finding a specialist in freelance and self-employed accountancy like Taxup in London is vital. Taxup Contractor Accountants work only with people who have their own business or are sole traders and can offer the range of services that new and established businesses need. This includes basics such as bookkeeping and tax submissions as well as financial advice to help grow the business and ensure cash flow.
Once you know what you want to do and how you are going to do it as well as putting the preparation into place, you can start planning ahead. Every business wants to grow, make more money and be successful and the ones that do this manage by business planning. Use systems such as SMART goals to help plan the weeks, months and even years ahead so you know where your business is going.
Working a combination of plans and advice from your accountant will also allow you to take steps such as employing staff, expanding to new locations or offering new product lines. These all are the logical ways to grow the business and the timing is crucial.
Running your own business can be stressful and a little frightening but if you get the right support and have plans in place, then success is there for you. Keep goals realistic and achievable with the right dose of ambition thrown in and you will have the best chance of success.
Whether you are starting a business or are an existing business looking to make a change, choosing an accountant is always an important step. Getting the right information for HMRC and ensuring that your cash flow information is accurate is a hugely important part of being in business and an accountant is a key part of this. So what are the tips to choosing the right accountant?
Do I need an accountant?
One question many business owners ask if ‘do I need an accountant?’ and the answer obviously depends on your business, situation and finances. For some sole traders who have just started out, then bookkeeping software can often do the job – especially if you have minimal outgoings, no employees and most of your transactions are carried out online so receipts are easy to track.
PAYE – the system used to collect tax from employees automatically
This doesn’t mean that you need to employ a full-time, in-house accountant and the majority of businesses outsource to the right accountant in their area. For example, if they are based in London then London accountants will be the ones they employ to work with – the ability to meet up with the accountant to go through paperwork is a valuable facility.
Choosing an accountant
If you do a search, for example, for chartered accountants London, you will see a bewildering number of names that come up. So how do you go about sorting through those names and finding the right person for your business?
One of the first things to look for is that the person or company has the right qualifications and membership of any associations. The Association of Chartered Certified Accountants (ACCA) is one example and they hold their members to certain standards that work as a guarantee for businesses.
As well as qualifications and memberships, look at their insurance – do they have indemnity insurance to cover themselves if there is a mistake? Most accountants that are a member of a professional body will have some cover like this but check before engaging their services.
Building a relationship?
While qualifications, experience and professional standards are the most important things, it never hurts to also consider secondary elements to help you make a choice. Sure, you don’t need to be best friends with your accountant but you are building a relationship with them and need to feel confident in them.
Look for accountants who have worked in your sector before and have experience with businesses of similar size to yours as well – this means they will offer advice that is scaled to your business, not designed for companies bigger than you.
Choosing an accountant isn’t a lifelong commitment – you can change at any time. Most accountants work on a pay as you go system where you commission them to do a job and pay for it but there’s no commitment to return to them for the next task. So make sure you work with someone who you can afford, has the right qualifications and who ‘gets’ what your business is about. The Owner of The Serious Sausage Company gives some real life insight into his experience of choosing an accountant in this useful clip…