Why do small businesses need an accountant to help with the set-up process?
If you’re setting up a small business from scratch, you know that money is going to be tight. That’s why most entrepreneurs begin by trying to do everything themselves in order to keep costs down. But there are some compelling reasons to seek professional help from an accountant from the very beginning, which may end up saving you a lot of money in the long run.
Firstly, an accountant can help you get the structure right, especially when it comes to tax. For instance, often when a couple set up a business together, one of them will continue working in a full-time job until the business takes off. An accountant will help you set up an equal shareholding which will help keep finances ‘in the family’ when it comes to dividends. This can be especially helpful in cases where doing this can keep you under the 40% tax threshold.
Secondly, an accountant can help out with HMRC-related matters, helping you with VAT registration, setting up your payroll, registering for Corporation Tax etc. You can rest assured that your accounts would be set up accurately – it is not uncommon for people doing it themselves to make mistakes which can be costly to put right. And an accountant can also help you out with company registration.
The future isn’t necessarily bright
It is quite common for two or more friends or acquaintances to go into business together. Sometimes this doesn’t end well and the business suffers when friendships end and one of the partners wants out. To prevent a lot of grief and expense in such an event, it is recommended that all partners draw up a Shareholders’ Agreement before the launch of the business. A good accountant will be able to recommend a solicitor who specialises in these agreements.
Accountants are always happy to help give clients advice which points them in the right direction. They can put you in touch with bookkeepers, and can also recommend the right bank to have your company account with – the bank that is right for your personal account isn’t necessarily the right bank for your business.
It is always a good idea to keep in touch with your accountant and recommend touching base every three months to make sure everything’s running smoothly? This is especially important if you’re doing your own bookkeeping, as you need to make sure it’s up-to-date and being completed properly – if not, there will be plenty of time to fix any errors.
From time-to-time, all small business clients have little questions that will only take a couple of minutes to answer, but they are reluctant to get in touch with their accountant about it. We don’t have a problem with our clients calling us with such questions and are happy to answer them free of charge. That way small issues can be dealt with before they can escalate.