Most people believe that (chartered) accountants are only good at keeping books, file a tax return and do some random number crunching here and there . That might be true but there are also other things that an accountant can help you with. For example, in the UK, 84% of the FTSE 100 companies have at least one chartered accountant on their board.
There are actually quite a few things a chartered accountant can help you with apart from all the usual stuff. The list below is just a small sample.
1. Legal Structure of your company
A touch question to answer (especially when a company is about to be formed) relates to the legal structure. Should you choose to form a personal company, a limited company or a public company? Apart from the legal aspect of this “trilemma”, there are tax implications as well. Choosing the wrong legal structure will not only cost you on an annual basis but can also put your personal financial wealth at risk. Your accountant should be able to advice you about the costs and the benefits of choosing one legal form over the other.
2. Increased sales but profits remain stable
One of the most common problems that SME companies face is the uncontrollable discretionary expenses. Your sales might have increased but your profits remain stable. That’s an indication of uncontrollable costs, bad debts, inefficiencies or a combination of them all.
Your accountant can work with you to identify what are the costs that can be cut, whether your working capital supports your day to day operations (and your goals for growth) and whether your company faces difficulties to turn the sales made into cash.
3. Tax inefficiencies
Tax inefficiencies can be a result of tax penalties or a result of tax claims that your company is not making. Are you sure you are claiming everything you can? In addition, the last thing you want is to be paying unnecessary penalties because you didn’t know what’s the deadline is to file a tax return. These are common things that cost companies on a daily basis.
4. Competitive Advantage and Growth Strategies
The common perception is that accountants are just bookkeepers. That is far from being true. An accountant (especially a chartered accountant) knows very well about bookkeeping but you don’t really have to be a chartered accountant to do a couple of credits and debits.
A chartered accountant can help you find what are the things that your company is doing well, identify your key strengths and weaknesses and form a strategy that can help your company grow. A CPA (for the US) or a Chartered Accountant (for the UK) should be able to advise you about potential growth opportunities that will create synergies and add value.
5. Business Software Advice
Choosing the most suitable accounting software, ERP or CRM software is a tough decision. First of all, the options are endless. In addition, companies launch a product, support it for a couple of years and then decide to launch a different product and stop supporting the first one.
In addition, another hard choice to make is whether to choose to host your software on the cloud or not. Accountants are not IT experts but they do have experience when it comes to accounting software and they can contribute to such discussions.
6. Accounting Treatments
Finally, accountants can help you put to your books in order by choosing the correct and prudent accounting treatments. They can of course process journal entries and file a tax return as well. I chose to list that last because I think that an accountant can help your company by doing more than just posting journals.