5 Reasons Why Accounting Is Important For Your Business
Updated: May 30, 2022
At HUBU Accountants we believe that Financial Accounting and Managerial Accounting are at the heart of every Business - for more reasons than you may think. We may seem biased, but without listening to the advice from their Accounting team in the past, some Businesses have come across easily avoidable and tricky situations. These situations can lead to a lot of unnecessary additional paperwork, large fines, a bad reputation; or at the very worst a criminal offence.
According to the Corporate Finance Institute, accounting is defined as:
“... a term that describes the process of consolidating financial information to make it clear and understandable for all stakeholders and shareholders. The main goal of accounting is to record and report a company’s financial transactions, financial performance, and cash flows.”
Perfectly understandable right? Well, for some Business Owners this process is not as straightforward as it may seem, which is why at HUBU Accountants in Wales we pride ourselves in providing the utmost customer care, diligence and guidance for our clients. So with that said, we thought we’d explore in more detail the Top 5 Reasons why at HUBU we believe having an Accountant to help you with your Business is not only unavoidable, but makes very good sense!
1 - Organisation = Less Stress
People often ask me how I manage to be so organised. Well, it’s partly the way I’m made (I don’t have OCD, but I do love a tidy desk!) and it’s partly to do with the role requiring me to be this way.
As you will read later on in this blog, there are hundreds of deadlines throughout the year that many Businesses are not aware of, and therefore run out of time to get all their accounting documentation ready for. Having everything ready for these tax deadlines takes organisation, accuracy and thorough planning, as well as a knowledge of what is required in terms of evidence and documentation.
As a Self Employed person or a Business, there will be certain things that your Accountant will need you to keep a track of, such as certain expenses, invoices and other Business transactions. At HUBU Accountants we will advise you from the very beginning what these are, and help you to recover or consolidate what you may have missed from earlier in the financial year. Overall, having organised accounting processes will enable you to and ultimately improve operational efficiency within your Business.
2 - Understanding true Profit and Loss
Many people have not even heard of the terms ‘P&L’ or ‘EBITDAH’ before starting their own Business, let alone understanding what they mean. This can lead to great misunderstanding when it comes to reporting what you have earned for the year. For example; you may mistake your full revenue for profit, without taking into consideration the money spent in starting up the Business for things like purchasing of equipment or vehicles, as well as the money spent in maintaining the Business such as wages, taxes or marketing.
There is also the fact that Business Owners will sometimes use their own personal finances to bolster the Business, without realising that this should be seen as a ‘Directors Loan’ and needs to be accounted for. At HUBU Accountants we can help you to see the full extent of these Business expenses and to understand what your ‘take home pay’ will be at the end of each financial year; whilst also helping you to improve your Business Financial Statements through cost control.
3 - Support and guidance
For those who may not be as literate, or who do not have time to look after their own accounting, the HMRC world can be a rabbit warren of forms, guidance notes which are sometimes hard to decipher, endless downloads and headaches.
There are many HMRC forms that may need to be completed at any one time for a Business. In fact, there are 43 sections listed under the HMRC website, with each section containing potentially dozens of forms. So you can imagine just how confusing it can get, not to mention time consuming, for a Business Owner to be doing their own research and to understand which information is right for them.
As an Accountant, it is our job to ensure that not only are we aware of each and every one of these forms and what they mean, but that we advise you correctly on which ones to fill out. Sometimes we do this for our clients, other times they will be required to fill this in themselves, however at HUBU Accountants in Wales we will always guide you through each and every step of the process.
4 - Tax Benefits
Often when we think of Income Tax it can be seen as a negative. When you are running a Business, there are more types of Tax to deal with than as an individual; Corporation Tax being one of them. However; there are some silver linings when it comes to Tax, and there may be some tax reliefs and personal allowances that you are missing out on as a Self Employed person or Company, simply due to lack of knowledge. For more information on this you can contact HUBU Accountants and we’ll be happy to put you on the right path.
5 - Reminders for important deadlines
There are hundreds of important HMRC deadlines that crop up throughout the course of the financial year, such as submitting Corporation tax returns or submitting P46 for employees etc. For instance, did you know that today is the deadline for VAT Returns and payments of Accounting Quarter period ending 30th April 2021? Well, when you work with HUBU Accountants there will be no need for you to know or remember these dates, as we will do that for you! And don’t worry, you won’t be getting a last minute notification causing you to scrabble through your filing cabinets searching for documents and files; at HUBU we will work alongside you throughout the year to ensure you are ready for any of the deadlines that you will be expected to meet.
If you are thinking of becoming a Self Employed person, or starting up your own Business and are looking for a reliable, knowledgeable Accounting firm, please contact HUBU Accountants today and see how we can help you with the Financial and Managerial Accounting for your Business.