The majority of all new businesses have a few common issues that they must deal with initially. Most of them are financial in nature of course, and financial problems are exactly the kind of problems that accountants deal with. The following discussion should help in explaining the connection in more detail.
Accountants Provide Tax Consultation and Guidance
All private companies must pay their due business taxes and file their returns within the mandated 12-months to avoid paying penalties. Even after filing taxes, several start-ups close shop every year because they could not file their tax returns in compliance with all the HMRC rules and regulations.
Good accountants make sure that this does not happen to any of their start-up clients. Accountants are trained professionals who already know everything that there is to know about tax laws in the UK. They will help with all aspects of taxation for a start-up, ensuring compliance, timely payments and regular filings (as and when necessary). All an entrepreneur needs to do is listen to his/her accountant, and they will take care of the complexities such as:
- Organising, keeping and balancing the books (aka bookkeeping) to ensure accurate recording of all relevant business transactions
- Procuring the necessary support documents for filing the returns, such as profit/loss reports, balance sheets, etc.
- Calculating and filing annual company tax returns and quarterly VAT returns
- Filing the company’s annual accounts
- Minimising payable taxes by claiming business expenses and other benefits, as applicable
Accountants Act as Financial Business Advisors
Any qualified accountant should be able to help their clients with accounting, bookkeeping and taxation. However, playing an advisory role as a business guide is not something that just any accountant can do. It requires actual work expense in that specific field of work, in addition to vast knowledge about business accountancy.
If you are looking for chartered accountants in Birmingham who fit that mould, there are plenty of accounting firms with experience in multiple sectors of the industry, waiting to help start-ups and established companies alike in succeeding and growing.
Accountants Provide the Data Needed for Critical Business Analytics
Business analytics is a broad term that includes data from several departments, and not just accountancy. However, the availability of accurate accounting data is absolutely crucial if the business analytics are to be of any use. Quickly go through the following to know which types of data are provided by accountants for business analysis, and why they are so important for start-ups:
- Bi-annual and annual financial reports that compare the start-up’s net income during each quarter of a fiscal year
- Identification of the individual and collective factors that led to a comparative increase/decrease of net income in each quarter
- Profit/loss pattern identification by comparing quarterly and annual data from two or more financial years
- Conducting audits to provide insights for maximising business expenses and improving the start-up’s financial efficiency
- Providing detailed info on overdue invoices and the parties that still owe them to the start-up
Accountants Analyse Risk Vs. Reward Scenarios
For most entrepreneurs, the very act of launching a start-up in any sector is a risk, because new businesses fail more often than they succeed. Experienced accountants are financial experts capable of estimating, guiding and mitigating every risky move for their clients.
As their guidance is always based on calculations, market knowledge and experience, a good accountant can tilt the risk-vs-gain scenario in a start-up’s favour from the get-go. Long after the start-up establishes itself as a reputed company in its sector, financial risk analysis will continue to play a crucial role in determining the steps for sustainable growth.