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Due to the importance of maintaining accurate financial records, many businesses prefer to outsource their requirements to an established accountancy firm. Although some companies do have in-house accountancy staff, they are often assisted by external accountants or tax advisors.
Legally, businesses are required to submit accounts to the HMRC and failure to do so can result in significant fines and sanctions. Working with accounting firms enables companies to outsource the preparation and filing of accounts to another organisation. While businesses maintain responsibility for filing accounts on time, in reality, your chosen accountancy firm will carry this out on your behalf.
Reducing Your Tax Liability
In addition to meeting your legal obligations, accessing advice from reputable professionals, such as the top 10 accounting firms, can help to reduce your tax liability. Tax cannot be avoided, but you can structure your business in order to create the most tax efficient organisation.
If you’ve been operating as a sole trader, for example, accounting companies may recommend that you develop a limited company instead. In addition to providing other benefits, operating as a limited company may enable you to reduce the amount of tax you’re required to pay and could, therefore, ensure the business retains its revenue.
Similarly, larger institutions may decide to restructure their businesses based on advice from experienced accountants. Creating subsidiaries, for example, may prove to be more tax efficient that merely expanding an existing company.
While your tax liability is only one issue which will affect the structure of your enterprise, it shouldn’t be overlooked. Working with accountancy firms and obtaining specialist business finance advice can help to determine which structure will work best for your business and how you can operate in a tax efficient way.
Processing Company Accounts
Although company accounts must be maintained and filed on a regular basis, you may want to use top accounting firms to handle director’s tax returns as well. Often, company directors are paid a salary, as well as dividends, as this can be a more tax efficient method of organising remuneration.
As the salaries of senior staff are often inextricably linked with the company’s accounts, it can be advisable to use the same accounting company to complete both tasks. In fact, many businesses choose to use the same accounting firm to carry out all elements of their accountancy requirements, particularly when it comes to using the top accounting firms on the market.
Many financial accounting firms offer a wide range of services and are able to meet all of your accountancy needs. If you require payroll or bookkeeping services, as well as company accounts, for example, you may be able to use the same accountancy company.
Similarly, you may want to use an accounting firm which can process your businesses capital gains, as well as the business accounts. Although companies are required to pay corporation tax, rather than capital gains tax, when assets are sold, those who are self-employed, sole traders or in a partnership, may be liable to pay this form of tax. Due to this, it may be appropriate for you to use an accounting company which can provide the accounting services you need now, as well as those you might need in the future as your business expands.
As individual accountants have different areas of expertise, you may find that different people work on your business administration but that one accountancy firm is able to provide all of the accounting services that you need.
Reducing Outgoings With Financial Accounting
Although your company accounts should record every incoming or outgoing transaction your company processes, financial accounting is far more complicated than this. Accessing accounting services from the top accounting firms will mean that you can take advantage of potential tax breaks and retain as much company revenue as possible.
If the company has made losses, for example, your accountant may be able to ensure that they are carried over from one financial year into the next, thus reducing your current tax liability. Similarly, the depreciation of company assets can be accounted for so that your tax bill is lowered accordingly.
In addition to this, businesses which have a significant turnover may need to register for VAT. This can be done on your behalf when you obtain accountancy services and your accountant will be able to maintain records so that the business can claim back the cost of VAT they’ve paid throughout the year.
While effective accountancy services certainly require organisation and attention to detail, they involve so much more than this. In-depth knowledge of revenue law and tax guidelines, for example, enables professional accountants to reduce their client’s tax liabilities and ensure the business isn’t making unnecessary overpayments.
Working With A Small Business Accountant
As most small or medium businesses don’t require an in-house accountancy team, it may be appropriate for them to outsource their requirements to a dedicated small business accountant. An accountant who understands the needs of smaller enterprises can be crucial to on-going commercial success and could enable you to make significant savings in the long-term.
Accessing financial advice and information regarding small business financing, for example, could enable you to expand and take on larger contracts, whilst payroll assistance could help to ensure that staff are paid accurately and in a timely manner.
Accounting for small businesses is a somewhat niche area, although most experienced accountants are able to deliver these types of services. Accounting firms which specialise in working with small businesses, however, tend to offer accounting packages.
Start-up businesses may opt for a business accounting package which includes company registration, yearly company account filing and the personal accounts of the director. Alternatively, a larger enterprise may opt for a business accounting package which covers these elements but also includes payroll services for a specific number of staff.
With various packages available, accounting for small businesses is easily accessible and much sought after. Some small business owners may attempt to maintain their accounts without professional assistance, but this can be time-consuming and can result in businesses paying more tax than they need to.
By obtaining help with small business accounting, owners can ensure that they’ve met their obligations and that they are paying an appropriate amount of tax to HMRC.
Which Accounting System Works Best For You?
As in most industries, accountancy has evolved since the development of new technology. Accountants once relied on handwritten invoices and receipts to update company records, but accounts can now be processed in a different format.
Today, most accountancy is carried out electronically. Specially designed software enables accountancy firms to maintain business records and HMRC even accepts some returns electronically as well.
For businesses of any size, using accountancy software may enable you to maintain your financial records in-house and these can then be shared with your accountant. The use of cloud based technology and remote servers has made this even easier, as your accountant can access updated company information in real time.
Furthermore, using a cloud based accounting system also ensures that your business finance data is stored externally and backed up. Should your in-house IT systems crash or are subject to hacking, your confidential financial data will be easily accessible if it is stored remotely.
Any form of business finance or accounting can be complex and it’s always advisable to seek professional help, particularly if you’re unsure of your legal obligations. By doing so, you can avoid potential fines and ensure that your business is operating effectively.
Due to financial constraints, many business owners look for cheap accountants when they need advice and assistance. Fortunately, cost-effective business packages and fixed fee accountancy solutions ensure that businesses of all sizes can access the accountancy services they need, without being charged an excessive amount. Finding a cheap accountants is easy too, with help from Cost Compare Limited.
While many businesses view their accountancy obligations as burdensome, the opportunity to access financial and tax advice from a qualified accountant should not be overlooked. Working with an accounting firm, or an independent small business accountant, can enable your business to reduce its outgoings, retain its revenue, meet legal obligations and, ultimately, ensure that your organisation reaps the rewards associated with fiscal planning and accurate financial accounting.
Finding a cheap, small business accountant is simple. Use the comparison services at Cost Compare Limited today.