Forget expensive office space with fancy modern furniture, if you’re running a small business, then you must ruthlessly dispense with gratuitous expenses. But although you might be able to do without a Facebook page curator, accounting software might be another matter. When keeping an eye on the bottom line, don’t be stingy with the necessary expenditures which are vital to the health of your business.
A good accountant will actually save you money in many cases, guiding you toward more economically efficient options. As your business grows, you should also increase the allocated accounting budget, as this is likely to pay off in the long run. It’s not just a matter of making sure your taxes are all paid and that bookkeeping is above board, but also of learning the tricks of managing funds and expenses, so that you don’t pay more than you have to.
A trained accountant, such as the trusted advisors at QuickBooks, can look at the specific circumstances of your business in order to identify which methods will save you the most money. A reputable accounting firm should allocate a dedicated accountant to your business, whose wisdom and experience will be an invaluable asset. They will work with you, guiding you on the best practices of accounting and bookkeeping and helping you to grow your business and save on taxes.
Your accountant might, for example, advise on whether you would be eligible for the flat rate VAT scheme (FRS). This government incentive lets you charge VAT on invoices at the standard rate and then pay HMRC back at a lower percentage. If your turnover is less than £150,000 then you could apply for FRS and keep the difference between what you charge in VAT and what you pay HMRS as your profit. The FRS is just one of a myriad of incentives that a professional accountant can advise you on.
If all the above seems like Greek to you, then you’re better off relying on an accountant so that you can devote more of your time to other aspects of your business. If, on the other hand, you’re not intimidated by figures and paperwork, then you may consider whether it is worth doing your own accounts using online accounting software.
One of the most important aspects of personal finances is keeping on top of your paperwork and avoiding late penalty fines. Being just one day late can incur a fine of £150, while late submission of annual accounts by 6 months incurs a fine of £1,500. You need to make a note of any deadlines, and be sure to keep all expenses, invoices, receipts, payslips and other relevant paperwork so that it can all be declared. Accounting software such as QuickBooks not only lets you know about deadlines, but can also be used to collate all the important data into one place for easy management from any location.
QuickBooks is also available as an app which is free for all subscribers, so you can manage your finances on the move. Obviously, making use of this accounting software solution is far cheaper than hiring a professional accountant. The once tedious and confusing paperwork of accounting is now far simpler thanks to QuickBooks, which is why a great many professional accountants make use of it themselves, but it still takes time. If you want to go the DIY route then you need to determine how valuable your time is and how much of it you can afford to devote to accounting. You may find it more economically prudent to hire a professional accountant, especially if doing your own accounts could distract you from other areas of your business that require frequent attention.