Business Information

Historically, the role of the accountant involved assisting clients in the preparation of their yearend accounts, the assistance in preparing the yearend corporation tax computations and returns and the assistance in preparing personal tax computations and returns. However, things have moved on and the role of the accountant has changed.

The role of the accountant has changed from that of general compliance services to more of a business advisor, and as such many accountancy practices label themselves as business advisors. Consequently, the services provided by accountants

i) Corporate finance

Corporate finance is a wide specialism that includes many different things such as business acquisitions, business disposals, obtaining finance from third parties (including banks and angel investors), preparing business plans (for funding applications, internal  management purposes etc), re-financing and consolidation of existing debts.

The corporate services provided by an accountant can be as much or as little as required by the client. For example, one client selling their business many require assistance all the way through the transaction from marketing the business for sale right through to completion, whereas a more sophisticated client may only require assistance in the preparation of a detailed sales memorandum. Every client is different and a good accountancy practice will treat every client as an individual and tailor the service to their exact needs and requirements.

ii) Payroll services

When a business only has a handful of employees the payroll is often simple and can be done in house. However, as the business grows and more employees are taken on the payroll often becomes a full time job, requiring a dedicated department of trained staff and sophisticated systems, which is likely to be expensive.

Many accountancy practices have payroll software and staff that are trained to use it. Whilst the processing of standard payroll may be quite simple there are other complexities, such as benefits, split pay etc. that are more challenging to put on to the payroll system. It is with these more challenging areas where an accountant will be most useful.

Non compliance with tax can carry severe penalties and, whilst many may not like the fact, it is important to ensure that the business’s taxation affairs (including PAYE and national insurance) are up to date and correct, therefore an accountant is a valuable asset.

iii) Book keeping services

When running a business it is important to ensure that the financial books and records are up to date. As a business owner, you are going to want some idea of the monies owed by customers, the monies owed to suppliers and the amount of cash in the bank in order to ensure money is collected in as quickly as possible and that suppliers are paid within credit terms to ensure they continue to supply the business. In addition, HM Revenue & Customs are going to want to see all your financial records if there is a compliance visit. Messy records often make for a difficult visit, whereas neat and tidy ones will make any visit much easier.

Simply putting invoices and bank statements in a file does not constitute book keeping. The business should maintain an accurate sales ledger, purchase ledger and general ledger clearly showing the transactions of the business. Proper book keeping can take a lot of time, and whilst there are many accounts packages to make the job easier these often create more problems as they do require some level of training and understanding of double entry, which many small business owners do not have.

Many accountancy practices will offer book keeping services where they will take the core records, i.e. the bank statements, sales invoices, purchase invoices and statements, petty cash book etc. and input the data on to an accounts software package, hence allowing you to continue to run the business.

Once the information is on the accounts package you will be able to generate various reports that show when customer debts become overdue (and hence need chasing up), when supplier invoices become due (and hence paying), how much cash is in the bank (hence allowing you to see if you need to extend an overdraft or get a loan if the cash is running out, or invest if there is too much cash).

iv) VAT services

VAT can be a confusing subject and with the possibility of severe consequences in the form of fines and penalties if you get it wrong, it is often advisable to seek professional help and your accountant should be able to deal with this.

An accountant will take the core records and compile the VAT return for the quarter. An accountant will know what costs have recoverable VAT on and at what rate it can be reclaimed, and what sales should have VAT charged on and at what rate.

v) Adhoc reporting services

Most accountancy practices will also offer help and advice with any other reporting services that clients are likely to need. For example, many UK tour operators are regulated by ATOL, which requires an annual report on their members. The Law Society also requires an annual report on qualified solicitors, which is a service many accountants will be able to provide.

Professional accountants offer a wide range of services that will help to ensure their clients get the most out of their business, so if you are looking for assistance in any aspect of your business it is worth having a discussion with your accountant, as the chances are they can help.

With accountants now taking on the role of business advisers it is worth finding a good accountant and developing a solid business relationship with them as the more the accountant knows about you and your business, the more they are likely to be able to help. Because of this it is worth taking time to look around and check out many different accountancy firms to find the one you are likely to work best with. Whilst it is tempting, the lowest price should never be the deciding factor in choosing an accountant.