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What can an accountant can do for small business owners?

If you run a company in the UK, there’s a strong chance that your firm is classified as a small to medium sized enterprise (SME). This is because, according to the government, over 90% of all firms that operate here fall into that category.

These companies typically employ between 1 and 39 people. They make a considerable contribution to the economy of the country. Clearly, these companies can and do thrive. However, the UK is a competitive place, and every year thousands of firms run out of money, and have to fold. This is the case in all parts of the UK, including places like Heswall, Prenton and Spital.

If you want to ensure that your business is not one of them, it is particularly important to get your finances right. Here we explain exactly how an experienced accountant can help you, as a small business owner, to maximise your profits, and manage your cash flow, so that you can continue to thrive and succeed:

Help you to secure finance

For small business owners, securing the finance that they need to expand is a big problem. The fact that their turnover is relatively small, and that they tend not to have much in the way of physical assets, means many lenders see an SME as a high risk.

A good accountant will help a firm to get around these issues. They know how to present your business in the best light possible.

The fact that they have worked on hundreds of applications means that they have the necessary experience to make sure that yours is filled out correctly. In addition, a good accountant will provide your company with financial reports to support your request for a loan.

Free up time for you to market your business

One of the biggest issues small business owners face is finding enough time to make sure that everything that needs to be done is done. Understandably, when things become busy your focus is on delivering your orders or services. This makes business sense. After all, if you provide a good service the chance of your securing further orders is greatly enhanced.

Unfortunately, in a company with a small workforce having to spend more time on customer service can cause issues for other parts of the business. Often, important tasks like the accounts are not done. Sometimes, there are simply not enough hours in the day to keep everything up to date.

Employing an outside accountant gets around this issue. When you do so, you know that regardless of what is going on in your business your accountancy tasks will be done.

This ensures that your staff receive their wages, on time, and that government taxes are paid, in full, and when they should be. It also means that you can issue your invoices on time, and make sure that those who do not pay them on time are chased up. This ensures that there is enough money flowing back into your business to enable you to buy the materials you need to fulfil new orders.

Provided your accounts are up to date, you can continue to print off cash flow reports. This enables you to spot gaps before it becomes too late to do anything about securing the finance your business needs to continue to function.

Help you to understand your business better

The fact that you always have access to up to date accountancy reports will help you to understand your business better, and could make it more profitable. It is particularly important for new company owners to understand their business properly. They need to be able to see which products and services are profitable, and which are not. Doing so is the only way to keep the bank account of a small business out of the red.

If you are an SME entering into a new market, or offering new products or services you need to know quickly if you are making a profit. This ensures that you do not end up pouring money into an area of your business that is losing you money rather than helping you to make it.

To prepare for expansion

Small businesses need to be continually looking for the next opportunity. They have to spot them early and move fast to be able to take advantage of them. In a place like the Wirral or Birkenhead, there are often dozens of firms offering similar services. As a result, the company that moves fastest is the one that remains profitable, while others run out of work.

Employing a good small business accountant will help you to analysis these opportunities from a financial perspective. They enable you to work out whether it is economically viable for you to pursue. This saves you from investing time and money into projects that are not likely to be profitable for you.

Local knowledge and connections

If you employ a local accountant, they will be aware of important business schemes, in your area. In other words, projects that you may be able to take advantage of to grow your company.

For example, the “Birkenhead First” scheme, which is designed to boost business investment and grow the economy of the area, is bound to open up opportunities for local firms. A good Wirral or Birkenhead based accountant will be fully conversant with the scheme.

They are able to recognise opportunities your company could pursue and benefit from that arise from this type of project. Having the inside track on schemes like this can really help your business to be successful, and strengthen the economy of your area at the same time.

They will be able to help you to apply for any grants, as well as put together strong bids for project related work. Most accountants work closely with local business communities like the Wirral Chamber of Commerce, which means that they are also well connected.

As you can see, it does not matter what sector you operate in, or how buoyant your market is managing cash flow, and the rest of your finances is essential. Therefore, if you are a Wirral based business that has not yet hired an accountant, you should consider doing so as soon as possible.

Posted by Mark
August 26, 2016

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