The new Enterprise Nation business support platform brings together Enterprise Nation members and Institute of Chartered Accountants in England & Wales (ICAEW) member firms to make choosing a chartered accountant as an adviser much easier. Clive Lewis, head of enterprise at ICAEW, explains why.
The platform allows advisers to provide useful information on themselves. From an individual's picture to their social media output, advisers can personalise their profiles on the platform.
Why does a start-up or young business need an accountant adviser?
There are many ways an accountant can help a business:
- Small businesses are very time poor and tax compliance can distract the business owner from running the business. Recent figures showed the average UK small business spends £5,000 and three working weeks every year on tax compliance. An accountant can take the burden of this work substantially off the business owner.
- Maintaining accounting records can be a chore. An accountant can help by recommending a software system to cut non-productive time and give information on trading performance at the push of a button.
- An accountant can ensure that a business pays the right amount of tax at the right time. If the business keeps accurate and reliable records, the accountant can advise the business of the tax liabilities on its business profits in sufficient time for the business to put funds away to meet its liabilities when they fall due.
- An accountant can advise on minimising tax liabilities for the business or the individual owner. This can be achieved in a number of ways including maximising reliefs for business expenses, claiming capital allowances on expenditure on plant or equipment or utilising special relief schemes such as R & D Tax Credits.
- An accountant can advise if a business needs better cash flow management. If it is decided that the business needs to access finance, the accountant can help with an application for finance by providing past annual accounts and financial forecasts to demonstrate the business’ ability to repay debt finance. With so many finance suppliers in the UK (over 360 suppliers) an accountant can help decide which type of finance is most suitable for a business and which provider should be approached.
- If a business is intent on growing, it will almost certainly require finance perhaps including more equity finance (by the sale of shares). Having accurate and up-to-date accounts and financial forecasts can be a key factor in helping potential equity providers deciding to invest in a business. If a business does get outside shareholders by raising equity finance, the shareholders will require frequent and accurate information on the trading performance of the business.
If choosing an accountant for the first time, what should you look for?
Here are some tips:
- Don’t pick an accountant at random. Many accountants have specialism either in terms of technical expertise or business sectors they advise on. So arrange to meet a prospective adviser to discuss their services and whether they have experience in your sector.
- Have a look at the adviser's website. What does that tell you about them as individuals and their experience?
- Arrange to meet potential advisers and talk over your business with them. Tell them how long you have been trading and the challenges you face. Is the business performing as you had expected? What are your growth ambitions? What advice or suggestions can the potential advisor offer?
- What services do you require? Apart from preparation of annual accounts for tax purposes and the relevant tax returns will you need specific tax planning advice? Do you have employees and if so will you require payroll services? Are you VAT registered and will you need help with the quarterly VAT return? Are you a limited company or a sole trader? Is this the best format for your business? Do you export or are you considering exporting? On a personal level, have you made a will and do you need Inheritance Tax Planning?
- Do your accounting records provide all the information you need to run your business? Should you be considering changing to accounting software, perhaps using software through the cloud so that your accountant can monitor your records and keep a check on their accuracy?
Get Ready for Making Tax Digital
You may already be aware that H M Revenue & Customs (HMRC) will, from April 2019, require businesses which are over the VAT threshold and which currently file VAT returns to keep records and file returns digitally.
April 2019 may seem like a long way away but if your business is not already keeping its records digitally, it will require significant changes to get ready in time.
So it is advisable to prepare for the change by installing and utilising digitalised accounting software as early as possible.
It is likely that HMRC will follow the mandatory digital filing of VAT returns with compulsory digital filing of Corporation Tax and Income Tax returns. So it is advisable to make the change to digitalised record-keeping early to avoid last minute difficulties.
ICAEW Business Advice Service
Chartered accountants on the Enterprise Nation platform are ICAEW Business Advice Service members and will give a free advice session to any Enterprise Nation member. Just check that the adviser is displaying an ICAEW logo. You can see all accredited accountants in the People section here. Once you've selected an accountant, members can book a free taster section.
It is advisable to tell the BAS firm about the issues you wish to get advice on so they have a person with relevant experience at the meeting. After the advice session, you are free to leave without making any commitment to a continuing relationship.
Not a member? Free taster sessions with ICAEW accountants is one of many Enteprise Nation membership benefits. Join today!