Your business may be ticking along nicely, however, there are some clear signs when you may need additional advice from an accountant. Sage Business Expert Nicky Goringe Larkin, a Chartered Management Accountant and Managing Director of Goringe Accountants Ltd, explains when you know it’s time to hire an accountant.
- Your revenue is increasing however you don’t understand why there isn’t more money in your bank account.
An accountant will be able to analyse your figures to see if your profit is increasingly as well as your revenue, and will be able to identify why it might not be, for example your sales are increasing but you are losing your profit through projects with a low gross margin
- You don’t understand what your bank manager is talking about when they ask what your gross margin is, or you don’t know what the difference is between profit and revenue.
A good accountant will be able to explain financial terms in plain English, so that you can understand the finances of your business.
- You don’t know how to predict your tax bill.
With good planning and forecasting with your accountant you should be able to predict your future tax bills and not have any nasty surprises.
- You want your business to grow but aren’t sure what it would look like.
A forward thinking accountant will be able to help you build a business plan, so that you can see what your larger business would like.
- You are spending more time balancing the books than winning new business.
It is a good idea to understand how to look after your accounts and finances, especially in the early years, however, spending too much time on it isn’t an efficient use of your time. This is the time when you should bring in an accountant so that you can spend more time winning new business. After all most people don’t setup a business because they want to spend time bookkeeping.
- You are looking for additional investment or funding.
By involving an accountant in your investment or funding decisions you may find that they can suggest some different options. They can also give additional credibility when you are negotiating with a future investor.
- Your bookkeeper is doing a good job keeping your books up to date, but you need additional reports to help you manage your business.
An accountant will be able to work with you to clarify what your KPIs (key performance indicators) are and any other essential information that is useful to you when making decisions for your business. They will be able to put together this information into a useful management information report, which you may need weekly or monthly.
- You need to improve your profit but don’t know where to start.
Your accountant will be able to review your accounts with you, to identify where you could be increasing your profit margins and where possible cost savings could be made.
- You have had a Business Records Check from HMRC and they were not impressed with your record keeping.
Hopefully you won’t get to this point, but if HMRC are pointing out that your record keeping is poor, you really need help as soon as possible, and should an appoint an accountant.
- You are trying to sell your business.
You will need to provide a lot of information to a potential buyer, an accountant can help you put your information into a presentable format that the buyer would expect to see.