Most people who start a business don’t know a great deal about accountancy. They start a business because they have a passion for a product, a belief in an idea, or have a niche they can exploit.

There will come a point when business owners will need to make decisions about cash flow, completing tax returns and managing growth, and they may not be informed enough to do so. This is when they would consider hiring an accountant.

In this article we’ll go over some of the areas an accountant can prove indispensable to a client’s long-term success. These are the areas that answer the question at hand, what does an accountant do for a small business?:

  • Support setting up the business
  • Running business operations
  • Pushing growth
  • Tax admin
  • Make savings across the business

Support setting up the business

If a business takes on an accountant early on, the accountant can assist with managing the start-up costs so that the business can afford to start trading. This can range from compiling the cost of equipment, recommending how to manage stock levels and finding appropriate insurances, as well as producing realistic revenue forecasts and other financial projections that a business will need at the beginning of their venture. 

An accountant can also help a small business with securing investment. They may have the appropriate contacts so that a small business owner can meet the right lenders for their company. 

Accountants may also help on the pitch or business plan for securing investment. They will know exactly what financial details will impress potential investors. They will also be able to pull together the numbers in a way that can be understood, and help a business owner structure their presentation to be the best it can be to convince financiers to commit.

Running business operations

Accountants plot current and future cash flow and revenue for businesses. This takes the complex financial calculations away from the owner who has a business to run day-to-day. This will be a big part of an accountant’s role for a small business, because cash flow difficulties can make or break a new company. And if the accountant highlights a problem with cash flow, they can use any cash reserves or offer strategies to fix it before it becomes a larger issue. 

Business strategy is crucial for small business owners, so that they can focus on areas of importance. An accountant can help with setting goals for the company, and give the business owner the tools to be able to measure their progress, as well as a set of key performance indicators (KPI’s) to track of.

A good accountant will be able to identify the appropriate softwares for their client’s needs and budget. Not only will software automate many aspects of accounting and bookkeeping, but an accountant’s advice on this will save the business owner spending what little time they have on looking at softwares that they don’t know or understand. 

As well as managing any debt their small company client has, such as a business loan or credit cards, an accountant will be able to manage the debtors to the business. Simply put, they can chase the unpaid invoices and organise any debt financing, so that the small business can get on with the work itself.

Pushing growth

Identifying growth opportunities should be where an accountant can really add value to a small business. Once they’ve gone over all the numbers from the business, an accountant will be able to highlight areas that could grow the total revenue, and allow the business to scale up. Similarly, they will be able to identify areas which perhaps are holding a business back from growing and offer advice on what to do about these blocks.

Accountants can also help with strategic hiring. They will be able to suggest which areas would benefit most from an employee to allow the business to meet its goals. As well as figuring out if a business can afford to hire, train and pay the employee, the accountant can help with the government paperwork involved in hiring staff.

Tax admin

Bookkeeping responsibilities will also fall on the accountant. Many small business owners may have zero experience in keeping reliable books, and so this is one of the main reasons they may hire help.

Entrepreneurs that are new to business may also have little knowledge of what they can expense when it comes to their tax Self Assessment. An accountant will manage their receipts and expenses effectively so that there are no anomalies when it comes to self-assessment season.

An accountant will also be there every step of the way when it comes to completing a self-assessment for a small business. They will lay out exactly what proof a business may need to supply in order to have a seamless tax assessment, and ensure the business won’t pay any more tax than they need to.

Make savings across the business

Smart inventory management can be crucial to a small business, because with too little stock they are losing out on revenue, and too much may mean they are spending too much on storage as well as having to get rid of spare stock or damaged goods. An accountant can offer invaluable insight on effective stock levels.

Accountants will also be able to find ways to make smart savings in small businesses. Accountants can provide efficiency when it comes to bills like WiFi and gas/electric at a workplace, as well as stock storage costs or software needs. They should know where to get the best deals for the business’ needs and budget. 

How Countingup can simplify your accounting

Countingup is the business current account with built-in accounting software, helping thousands of business owners across the UK automate their bookkeeping and keep organised records. Find out more here.


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