Sometimes in the rush to get a small business up and running entrepreneurs overlook critical areas that vastly improve their chances of success. These oversights can be just down to focussing on the grand vision too much without considering the finer details, or it can be a desire to minimise expenditure because most small businesses aren’t flush with capital in the early days. One of the most common, and potentially damaging, is not hiring an accountant from the off.
With the amount of off-the-peg accounting software available it’s understandable that new business owners will consider running their books themselves, but very few entrepreneurs have the time to dedicate to doing a good job of the business accounting and even fewer are genuinely accounts literate. This means that even with the best software and the data it can provide they tend not to get an accurate handle on their accounts.
By hiring a firm of chartered accountants you’ll give your business a better chance at success. It doesn’t have to cost a fortune, and there are five ways that a good accountant can boost the profitability of your business.
1. Getting It Right From The Start
A good chartered accountancy firm will be able to help you refine your business model, smoothing out any kinks and highlighting potential pitfalls, many of which wouldn’t become obvious until too far down the road. This means that your business gets the best possible start instead of faltering when it’s just out of the traps.
2. Managing Cash Flow
Cash flow is the life blood of a business. In the early days many businesses lean heavily on bank loans and business overdrafts for their capital, especially if the business has a negative cash flow. Your business isn’t alone in this, the majority of business operates in this way, but making sure your cash flow is properly managed is the key to success. Chartered accountants in London deal will thousands of businesses of varying sizes in a multitude of sectors. This means they have a deep understanding of cash flow management and can suggest the best solutions to fit your needs.
3. Setting Correct Reporting
If you don’t know how to utilise your accounts software properly you won’t be able to access the necessary information you need to keep tabs on your business. In fact you may not even know which reports you really need to be running on a regular basis. Your accountant can help you with this, and help with bank reconciliations and tracking aged debtors, both of which are vital to your profitability.
4. Assessing And Implementing Growth Strategy
Any business owner reading this knows that the daily grind of running your business means that it can be near impossible to look to the future and analyse current performance and potential areas for growth and expansion. Chartered accountants in London usually have specialists in business planning and strategy who can help you prepare for the years ahead and do more than just keep your head above water.
5. Stopping Overpayment On Taxes
Don’t think of this as behaving like major corporations and certain high net worth individuals. This isn’t about questionable tax avoidance schemes. What it is about is understanding that many small businesses pay too much tax because they don’t take advantage of the various breaks the Government offers. Accountancy professionals understand where businesses can legitimately make savings on tax while still paying what is legally obliged to.
Find out more information on how chartered accountants in London can help to improve the profitability of your business.
Photo credit: 401(K) 2013