FROM BOOKKEEPING TO TAX PREPARATION: WHY SMES RELY ON ACCOUNTANTS
Many small businesses think that accountants are only required for large businesses, but in recent years there has actually been significant uptake of the UK’s small to medium sized enterprises making use of qualified accountants and their services. Here are a few reasons why SMEs are relying on accountants:
- 71 percent of small businesses use accountants to assist with annual tax preparation
- 50 percent of small businesses use accountants to prepare monthly payroll information
- 48 percent of small businesses use accountants during the run up to a financial audit
- 30 percent of small businesses use accountants for advice on future tax planning
- 16 percent of small businesses use accountants to oversee general business finances
- 14 percent of small businesses use accountants to manage all bookkeeping duties
In fact, small businesses are relying on accountants so much that accountants are now said to be the highest ranked professionals for business operations, beating out bankers, solicitors, insurance brokers, and HR services. Accountants can help small businesses by providing the necessary information to accurately complete tax returns, and minimising the costs of completing these tasks in-house.
However, it’s essential that small businesses take the time to compare accountants, read reviews, and determine whether a particular accounting firm has the skills and experience to meet your needs. Some common concerns regarding accountants include their tendency to be reactive rather than proactive, to struggle with timelines, and to not always be forthcoming with advice or guidance. Businesses will often find that different firms have different areas of expertise, and offer different services, so doing some research before selecting an accountant for your business is an important part of the decision process.
Despite these concerns, the advantages of accountants still shine through, most notably that businesses can save money by outsourcing financial duties. According to reports, around 14 percent of small businesses do not have any full time financial staff on their payroll, instead opting to pay accountants on an ‘as needed’ basis, such as during audits, at the end of the financial year, and around pay day. However, there are many other advantages of accountants, including their ability to assist in some of the most challenging financial aspects of running a business, such as cash flow management, paperwork, closing the books, accounts receivable, and managing payroll. It can be argued that accountants are an essential aspect for all small businesses. Why waste your valuable internal resources when you don’t have to?