Words by Donna Torres, Director of small business at Xero

An accountant can provide help and guidance to many aspects of a business. Traditionally, these areas include applying for a business loan, preparing and examining financial records and investigating tax circumstances.

But did you know that the role of an accountant within a business is evolving? As technology is developed to handle tasks that accountants traditionally have performed, attention will shift toward advisory roles. Gone are the days of solely crunching numbers.

Here are the instances when it is most beneficial to hire an accountant:

Sorting your finances

Small business accounting can be complex and frustrating. Accountants can help you keep on track with who owes you money and how much. By using cloud-based accounting software, accounts and charts can be shared with you quickly and with ease.  This means that you understand what is going on in your business at a quick glance. Keeping track of things like cash flow will be easier than ever.

Writing a business plan

When writing your business plan, it is useful to include input from your accountant. They will be able to use cloud-based accounting software, such as Xero, to add in reports and financial projections. In doing so, your business plan will be more realistic, thoroughly researched and more likely to succeed. Gaining these kinds of insights from the very beginning of your business journey will give you invaluable early insights, saving time and resource further down the line.

Understanding legal requirements

Legal structures of various businesses can vary. They may take the form of a limited company, a limited liability partnership, a corporation, a sole trader or a proprietor. A business must decide which structure is right for them, after carefully considering all factors. This will inform your tax and liability. An accountant can talk you through each structure and help you choose the one which is right for you.

Applying for a business loan or overdraft

When applying for a loan, banks want every possible assurance that you will be able to repay them. A solid business case makes for good convincing that you will be able to pay them back. Accountants can help to improve the chances of an approved loan. By simply including one in your business plan, banks are more confident that you are taking this business seriously. Accounting software can provide facts and figures that will strengthen your application. Accountants can answer questions from banks about revenue projections and expenses.

Managing growth

Business grow at different rates. Sometimes growth needs to happen quickly. This can be induced by a new client or big project. An accountant can help you to handle growth transitions, such as hiring more employees or taking on more office space. They can look after the finer details (payroll, employee tax management, property tax, utility payments etc.), freeing your time up to look at the big picture of growth within the company.

Keeping on top of rules and regulation

With Making Tax Digital for VAT coming up in April 2019, being aware of legislation and deadlines is more important than ever. Businesses with a turnover above the VAT threshold (currently £85,000) will have to: keep their records digitally (for VAT purposes only), and provide their VAT return information to HMRC through MTD compatible software, like Xero. Your accountant can help you prepare for this significant change. They can also help you with:

  • Keeping you up to date with the latest tax laws
  • Preparing statutory accounts
  • Keeping your company’s status updated in the government’s company register
  • Maintaining records of administrative personnel, such as directors
  • Organising and recording share/stock allocation, such as when the business is formed, when a business partner leaves or a new partner joins

Selling your business

It’s unlikely that you’ll have run your business for years without hiring an accountant. However if you haven’t, you should seriously consider hiring one before you sell. They will be able to get your financial records in order and can produce account statements for prospective buyers. By using high quality accounting software, useful charts can be created which show your business in a positive light. Selling your business might legally require a due diligence process. In this case, your accountant can speak to your prospective buyer’s accountant.

An accountant can also prove vital in ensuring that your financial affairs are correctly structured so that you get the most money from selling your business.

As you can see, accountants can be of great help during all your business’ milestones, big and small. While that doesn’t mean you have to hire one, the right accountant can make everything run a lot smoother, so you can focus on what you love doing.

Check out the Xero Advisor Directory if you’d like to find the right accountant for you.


About Xero

Born in the cloud, Xero is a beautiful, easy-to-use platform for small businesses and their advisors. The company has 1.6 million subscribers in over 180 countries and a thriving ecosystem seamlessly integrating with 700+ apps. On the inaugural 2018 Financial Times FT1000 High-Growth Companies Asia Pacific list, Xero was the fastest growing tech company in the $200 million+ segment. Xero won the Small Business Accounting, Practitioners’ Choice Award at 2018 Accounting Excellence Software Awards in the UK.

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