It has often been said that a good accountant will save you more than they cost you. This may not always be true in the strictest and most literal sense, but an accountant can still be the most cost-effective way to handle your business’ finances.
When most people talk about accountants saving you money they are referring to making sure that a business runs tax-efficiently. Having your accounts handled by a professional can indeed save money in this way. Accountants are more than a service provider to many businesses, acting also as a trusted tax advisor. Even when not specifically acting as a tax advisor, in the course of doing your accounts they will ensure that all allowances, deductions, and reliefs to which you are entitled get properly claimed. Accountants will also ensure that there is no accidental underpayment, which could prove more costly in the future than getting it right first time. Accountants can also act as a tax adviser when it comes to choosing a structure for your business. For example, if trading as a limited company would be better than remaining a sole trader, either at the start or when your business has grown, a good accountant and tax advisor could help make sure you discover this promptly.
Tax-efficiency alone will offset some of the cost of turning to a professional accountant who will also act as a tax advisor. However, often this alone will not mean an accountant is saving you more than they cost. However, this is only part of the story. It is also important to look into the time investment that accounting requires. Depending on the size of your business, this will either eat into your own time or that of an employee. If you employ somebody to handle your accounts, this will probably be more expensive than outsourcing to a professional accountant and the benefits are clear. Even if you are handling your accounts personally, these are effectively hours in which you are working and not being paid. By outsourcing an accountant, you can free up that time to market your business and add to your workload, complete more paid work, and generally grow your operations.
When raw monetary savings and the effective cost in working hours are both considered, it is entirely possible that an accountant will indeed save you more money than he or she will cost. At the least, the cost of outsourcing your accounts will be significantly offset. Even if the effective saving is not greater than the cost of the accountant’s services, it is quite likely you will be left with a small price to pay for a professional who can ensure your accounts are handled properly and in a way that is mistake-free and fully compliant with the law.