When running your own business, your focus is on delivering the very best service to your clients. However, working for yourself means you have more to manage. You have responsibility for managing your finances, tax affairs and compliance obligations. This can often mean you have a lot on your plate and may miss things that can impact your business. These issues often build over time and go unnoticed until it’s too late. Therefore, having an accountant is essential in noticing problems before they affect your business.
At Hanley & Co. Accountants, this month’s blog looks at what issues your accountant will spot before you do. For more information, call us on 01539 821869.
Cash Flow Issues
A business can appear profitable on paper while still experiencing cash flow difficulties. This is one of the first things an accountant may identify when looking at your accounts and financial forecasts. You may be making sales and generating a healthy turnover, but if customers take too long to pay invoices, your available cash could be under pressure. Additionally, regular expenses like wages, rent, utilities etc still need to be paid on time.
An accountant can examine your cash flow and identify warning signs, such as increasing debtor days, or a growing gap between money coming in and going out. They may recommend creating a more detailed cash flow forecast or reviewing payment terms.
Potential Tax Issues
Managing your taxes is an important part of an accountant’s role. Beyond ensuring compliance and minimising your liability, an accountant actively monitors your financial activity throughout the year to keep an eye on potential tax issues.
By monitoring income, expenses and cash flow, they can identify patterns that may trigger a problem. This means you won’t be caught off guard, and it gives you time to plan ahead.
Your Profits
Business owners often focus heavily on turnover. However, turnover alone doesn’t tell you how successful your business is. Your accountant will look beyond revenue to examine your profitability and margins.
Understanding the difference between turnover and profit is essential when making decisions about your business’s future. With insights, you can operate more efficiently.
Rising Expenses
Many expenses can go unnoticed and increase over time. Things such as tax bills, insurance premiums and subscriptions can go up without notice, which highlights the importance of closely tracking these costs. Your accountant will monitor:
Monthly expense trends
Unnecessary expenses
These increases may not seem like much individually. However, the change in your margins can be significant. You may not realise how much you spend each year on these types of services. Identifying and eliminating these expenses can improve your net profit.
Your Accountant Could be Seeing the Bigger Picture
As a business owner, it is natural to focus on what is happening right now. However, your accountant can be one of your most valuable business advisers. From identifying cash flow issues and unnecessary expenditure to highlighting growth opportunities, your accountant can help you make more informed decisions.
How Can We Help?
If you require an accountant, contact Hanley & Co. Accountants. Call us on 01539 821869. Alternatively, send us a message via our contact form and we will be in touch.
