Accountants are a type of professional that many people only associate with big-shot companies or individuals with complicated financial affairs.
However, in reality, many individuals use the services of an accountant whether it’s to help with tax returns, to improve their financial planning or even to assist with debt problems.
We take a look at the types of situations accountants become involved with and ask the question: when is the time right to employ an accountant?
For the self-employed
Contrary to popular opinion, it is entirely possible to manage your own accounts as a self-employed person. But the question you should really be asking yourself is not whether you can, but whether you should.
At the most fundamental, filling in your tax return and meeting any other requirements that you have, such as filing a VAT return, can be completed after a relatively small amount of research. However, to get the optimum result really requires professional knowledge.
An accountant can offer a range of services to help you not only satisfy your requirements but also to help your organize your finances in a way which means they are the most tax-efficient.
For contractors, freelancers, directors running limited companies and other self-employed individuals, an accountant should be employed almost straight away as they will play a proactive role in helping the business reach its full potential.
But it’s not just sole traders or small businesses that can benefit from an accountant’s input from the beginning; it’s equally important for large companies too.
Reviewing and structuring the financial set-up in order to maximize profits whilst minimizing the tax burden is only a small part of an accountant’s role.
Unlike sole traders, company accounts are likely to be filed publicly which means they need to be in of the highest quality as clients and potential business partners will have the opportunity to review them. It’s possible to tailor accounts, depending on how much information you want to divulge and in some cases it may be preferable to keep certain details private in order to hold a competitive edge. A professional will be able to put together a legally compliant document which still fulfills the needs of the business.
Accountants will also contribute to audits and quality assurance and can even be used as an outsourcing resource to help manage and run payroll facilities.
Having such an all-encompassing role means it is vital to be involved from the start, playing an integral role in helping the company to grow and expand.
Managing Personal Finances
However you don’t need to be either a company or a self-employed individual in order to find the services of an accountant beneficial.
When was the last time you sat down to properly review your personal finances? Checked your pension arrangements? Or that you had adequate tax planning in place to look after your family after you die?
An accountant can help set up Trusts to protect your assets against the taxman, and to ensure that your pension arrangements are suitable for your circumstances.
And if you have investments or shares, your accountant can provide advice about ongoing management as well as how to set things up correctly in order to manage any Capital Gains Tax burden.
Of course, your personal circumstances, finances and requirements will change and evolve so it’s important that you meet with your accountant regularly to make sure your arrangements are still right for you.
When things aren’t so great
One of the most vital services that accountants can supply is assistance when there are significant debt problems or when a business needs an urgent restructuring.
If brought in early enough, an accountant could help to prevent liquidation or bankruptcy and could prevent a total collapse of the business.
As well as formal solvency solutions, there are many different options which can be explored to solve debt problems. An accountant has the necessary skills, knowledge and experience to help turn things around or in the worst case scenario, facilitate the best possible outcome if administration is the only option.
An accountant has a wide range of services designed to help private individuals, small firms and large businesses. Although you might be inclined to try and complete as much as possible without assistance, by bringing in accountants early, you could find that you achieve a far more professional and preferable solution than by going it alone.
Image courtesy Jane