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Why your small business needs an accountant

You might be mistaken into thinking that as a small business, you are able to manage your own accounting and bookkeeping. However, as with any business, whether small or a start-up, the aim is always to grow. By enlisting an accountant, you can focus on the growth of your business whilst they handle all the paperwork. Read on to find out more about why your small business needs an accountant.

What do we mean by small business?

Of the 5.5million registered businesses in the UK, over 99% of them are classified as a small to medium-sized business. These small businesses and start-ups cover a whole range of useful and luxury goods, or services and experiences. However, small businesses have a number of defining characteristics that help to identify them as a small business. 

To be legally identified as a small business, your organisation must consist of less than 50 employees, with a turnover of less than £10,000,000 annually. A micro business is a little bit smaller than that, with less than 10 employees and a turnover of less than £2,000,000 annually. 

What a small business accountant can do for your business

In the UK, company accounts must be submitted to Companies House every single year, regardless of whether your company has been active or dormant in the last 12 months. Your accounts must be registered with Companies House within 9 months of the last Accounting Reference Date, also known as the ARD. This is usually the anniversary of the last calendar day of the month your company was registered. So, for example, if your business was registered with Companies House in January, your accounts must be filed with Companies House in the following September. 

If you run a small business, or you are self-employed, an accountant can bring considerable advantages. We’ve listed a few of the top ones below. 

An accountant helps you handle growth

As a small business, your aim is likely to be that you want to grow your business sustainably. By hiring an accountant, they will be on hand to help you handle these growth transitions, such as hiring new employees or moving to new locations. Your small business accountant will be on hand to look after the finer details of your businesses growth, such as payroll, employee tax management, property taxes, utilities and so much more. This frees up a considerable amount of your time to run your business.

To improve your cash flows

The old saying goes, “cash is king” and in business, this couldn’t be any more true. Cash is the fuel that will keep your business running and without proper control of your cash flow, you cannot make the critical business decisions necessary to keep your business running. 

Having a good small business on hand will help you to ensure that you have good credit control and cash management policies. For example, say your business offers services or goods on a 30-day payment term. By hiring an accountant, they can work to keep your business on top of your finances and ensure that you have good credit control with your customers paying on time. 

Reduce your workload

Understandably, you will want to focus your time on the day to day running of your business rather than spending your precious time and resources on bookkeeping and compliance. This is where an accountant comes in handy.

Let’s say, for example, that you run an Amazon business dealing in technology. Business is booming and you need to ramp up your resources to keep up with demand. This is where an accountant that specialises in accounting for Amazon sellers will come in handy. They can handle all of the day to day running of your business bookkeeping whilst keeping up to date with tax and company compliance. 

They provide valuable business advice

When you choose the correct accountant, they will also be able to serve as a valuable resource for business advice. Carrying with them a wealth of knowledge and experience from dealing with companies and clients from all walks of life, an accountant will be well versed in most of the problems and challenges you may encounter in your business. 

As a result, they are a brilliant resource for sound boarding ideas off and providing valuable business advice. For example, imagine you have a small food takeout business that is booming in popularity. So much so, that you consider opening a new location in another town. Your accountant will be on hand to help advise you on the potential challenges and pitfalls you may face as a business owner looking to expand, to help eliminate some of that risk. 

They help you to process payroll

Businesses with employees need to operate payroll effectively and in-line with proper payroll regulations to ensure that employees are treated fairly and legally. By not complying with payroll regulations, your business could face huge fines and backdated tax bills that may ultimately lead to the collapse of your business. 

By hiring an accountant to handle payroll for you, your business will not fall foul of payroll regulations, leaving you with one less thing to worry about. 

To help measure your businesses performance

Oftentimes, business performance is neglected by small business owners, as is setting timely and measurable business objectives. It has been suggested that approximately 90% of startups fail because they fail to keep on top of their objectives and measure these against their performance. However, an accountant will help you to understand your business’s performance that will enable you to effectively plan your business growth moving forward. 

They keep you up to date with tax and compliance regulations

By hiring a business accountant, they will help you stay up to date with the very latest in tax legislation and other regulations. In doing so, your accountant will help you from falling foul of legislation that may affect your business and cash flow should you encounter large fines and tax bills. 

As an example, perhaps you are struggling to keep on top of your accounts and taxes, with HMRC stepping in due to large unpaid corporation tax bills. In this instance, your business will most likely incur large fines and backdated tax bills. However, by having a small business accountant in place, you can avoid this issue altogether as they file your company accounts annually and calculate your tax bills. 

Find a small business accountant

You can see why it is so important to find a small business accountant to help you grow your business, whilst also managing your accounts and ensuring that you keep up to date with the latest tax legislation and compliance. 

When you are looking for a business accountant, it is important to not just consider the cost to your business. You need to also consider the service they are providing and how good their customer service is. It is vital that you feel comfortable enough to be able to have frank business discussions with your small business accountants about the future of your business and they must understand the nature of your business to help you operate effectively.

Consider all of these factors when looking for your first small business accountant and watch your business flourish with their support.

The importance of bookkeeping when selling on Etsy

During the past year, the percentage of retail sold through ecommerce platforms like Etsy rose from less than 20% to well over 35%. In the course of a single year that’s a phenomenal change, and it’s thanks to the entrepreneurial, open-minded makers and crafters who were able to take up that challenge and move their goods online during the toughest of conditions that we have been able to continue to send beautiful gifts and treat one another even in the hardest of times.

However, along with the creative side of doing business online comes an aspect that some of us are less keen on – accounting. It will do you no favours to simply stick your head in the sand when it comes to bookkeeping, so we take a look at the importance of bookkeeping for Etsy sellers, what support is available, and what you can expect from an Etsy accountant.

Why is bookkeeping for Etsy sellers so important?

Bookkeeping for any business, large or small, ecommerce or face-to-face, is important because it allows you to keep track of day-to-day financial transactions like sales and purchases. However, what sets apart the kind of business done over ecommerce platforms like Etsy is the speed at which these processes take place; goods are bought and shipped in a matter of hours in many cases, with purchases then immediately made to maintain stock levels. Below are just some of the reasons why bookkeeping is so important for Etsy sellers:

Keep track of income and outgoings

In order to understand what money you are making and spending and to keep a control on that expenditure day-to-day, you need to ensure that you are keeping track of those movements. Software such as Xero is designed specifically with bookkeeping for Etsy sellers and other ecommerce platforms in mind; it integrates directly with ecommerce stores so that the tracking of finances is smooth and automated, and you can access that information at any time and from anywhere via an app. 

Manage cash flow

As a small business, cash flow is equally as important as – if not more important than – profit. Whilst one of the key reasons for being in business is profitability in the long-term, if your cash-flow doesn’t enable you to pay your suppliers or workers, you won’t stay in business very long. Bookkeeping allows you to keep control over your cash flow, make sure that you are receiving money when you expect to, purchase stock only as you need it and pay your suppliers at a time that gives you the best chance of success.

Analyse successes and capitalise on them

Bookkeeping, for Etsy sellers just like all other small businesses, helps to inform you of what is going right and where you could improve. If you track when you sell goods, how much profit you make and from which product lines into which market areas, you can start to track what works for your business and what you should do more of. If you choose to work with a management accountant, Etsy, combined with the information from your cloud accountancy package, will provide them with all the data they need to be able to analyse which areas to invest in, expand on and promote, as well as enable you to forward plan for the future. 

If you are looking for an Etsy accountant who can support you in growing and managing your business, Kirkwood-Wilson Accountants are experienced in bookkeeping for Etsy sellers; we are Xero Gold Partners and can support you in the set-up and installation of a cloud accountancy tool as well as providing you with accountancy services to fit your needs longer term.

If you want to feel like you are in control of your business but with the support of an experienced Etsy accountant, get in touch with us for a chat about your business on 01704 546 000 or email [email protected].

Selling online? Why you need our ecommerce accounting services

Setting up your own online business is exciting! Finding out what works for your customers and watching your turnover grow over time, not to mention the many benefits in terms of managing your own time and making your own decisions, can be exhilarating. However, the idea that we have to suddenly become experts in every area of business – from marketing and sales to accounting and employment law – can be daunting.

The most effective way to run a business is to try to understand the basic requirements of every area of your business, match those with your own abilities, and outsource the bits that don’t fit with your skills, your time or your passion. The great thing about ecommerce accounting services is that, done properly, you can choose exactly which areas of your finances you want to outsource and keep the rest for yourself. We take a look at some of the benefits of using an experienced ecommerce accountant and how we could help your business grow.

How do you start your own ecommerce business?

Before we get down to the benefits of using an experienced ecommerce accountant, we thought we better start with the basics. How exactly do you start your own ecommerce business?

Firstly you need a product or a service. Once you have this, there are plenty of tools online to help you get set up to start selling across a range of platforms, including Amazon, Etsy and Ebay. 

One of the most important things to consider when setting up your own ecommerce business, is to get everything you need in place from the start. We are seeing more and more ecommerce business men and women who are supplementing their full time job with income from their ‘side-hustle’. With this comes the potential for nasty tax bills in the future, especially if you’re already close to the higher-rate tax threshold in your ‘normal’ job.

Organising an ecommerce accountant from the very start can not only help you avoid expensive tax bills, but they can also help you with business advice including cash flow management, setting budgets and giving you the tools you need to help your business grow. 

The benefits of using an experienced ecommerce accountant

Now we understand the importance of having that accountancy support right from the start, let’s take a look at some of the other benefits of having an experienced ecommerce accountant in place for your business.

Keep control of your finances

We’re not suggesting you hand over your accounts (and therefore your financial control) to someone else. Quite the opposite, in fact. We believe that all business owners should feel completely in control of their finances, whether you are running a multi-million pound manufacturing business or a sole trader ecommerce business selling handmade goods from your kitchen.

One of the great advantages of employing ecommerce accounting services which are designed specifically for businesses like yours is that, when used properly, you have access to, and total control over, your own business’ finances. 

Have full visibility of your business’ finances

One of the fantastic changes that accountancy has seen over the past decade is the development of excellent cloud accountancy packages which can be fully integrated with your ecommerce store and provide you with the tools you need to run your business and your finances seamlessly. 

We recommend that you choose a package like Xero, which provides an app so that you can manage your finances on the move, as well as giving you a solution that will track sales, costs and inventory so that you can take care of all your key financial aspects in one place. You can then choose how much intervention and support you want from your ecommerce accounting service provider, and that’s where ecommerce accountants like Kirkwood-Wilson come into our own; our expertise in digital accounting combined with experience in supporting small business owners of ecommerce sites means that we understand just how much flexibility you need. 

Create your own financial support package

It may be that you’re looking for ecommerce accounting services that will support you from the outset, assisting with setting up your cloud-based accounting software and helping you to integrate it with your ecommerce platform to ensure that the data is correct and the outputs are providing you with the right level of support. 

We did exactly this for our client Mad Fashion, who moved from manual tracking of stock, sales and costs to Xero, which fully integrated with their existing ecommerce site to take the pain out of their financial tracking. You can read more about how we supported them as a Xero Gold partner in their case study.

However, you don’t need to go all-in; Kirkwood-Wilson Accountants offer ecommerce accounting services that are completely tailored to your needs. Not only are we a Xero Gold partner and therefore well placed to help you set up digital accounting, but we also offer a range of basic accounting packages that can be adjusted to fit your needs and the needs of your business. 

Choose ecommerce accounting services you can trust

If you are looking for an ecommerce accountant, we will work with you to understand the level of support that your business requires and make sure that you receive just the right amount of back-up and advice to give you the best chance of growth – without breaking the bank. 

To find out more about our ecommerce accounting services, get in touch for a free consultation on 01704 546 000 or email [email protected]

Financial Planning at Kirkwood Wilson

Why staying close to your accountant matters now more than ever

Having a supportive accountant on hand to listen to any of your worries goes a long way. Most importantly, since all of our lives have turned upside down in the last few months with the impact of Covid-19, knowing you have the support and guidance of your accountant on hand is really important. Read on to find out why we, at Kirkwood Accountants, believe having a personal relationship with your accountant is so important.

Importance of having a supportive, personal accountant

As ultimately, the job of a personal accountant is to ensure you have accurate financial statements and receive advice on methods to save money and increase revenue. Having a close relationship with your accountant will help relieve any financial worries or stresses you may have.

As businesses from a wide variety of industries have seen significant impacts to normal operations, accountants like us at Kirkwood Wilson have been able to work very closely with our clients during these unprecedented times.

With government schemes, like the furlough scheme, business rates relief and VAT payments deferral scheme, having a local, personal accountant that you have a close relationship with gives you that ease-of-mind that you’re doing everything by the book whilst getting the most return.

At Kirkwood Wilson, an accountants based in the North-West, we have maintained very close relationships with our clients during the past few months and look in immense detail at everything that has happened.

Reasons why you should stay close to your accountant

During the coronavirus pandemic, we made sure we kept in touch with our clients and we strongly believe that this close relationship benefited them in many ways:

  1. We had a firm pulse on government schemes and announcements, meaning we were able to advise accordingly and accurately
  2. We are always on hand to help people and businesses to make positive decisions
  3. We are always available to listen to any concerns and provide financial advice.

1. Firm pulse on government schemes and announcements

With an unprecedented array of government schemes and business announcements being introduced, it is difficult to know which scheme applies to your business and which does not. With the Bounce Back Loan Scheme and Coronavirus Business Interruption loan scheme both applying to different business types, it can be difficult to know which one is best for your circumstances.

Our team of accountants understand you and your businesses situation and can effectively do the hard work for you. By having a close/personal relationship with your accountant, we’ll always try and do as much as we can to support you during these uncertain times.

2. Support you to make positive decisions

Having a personal relationship with your accountant enables you both to work efficiently together and talk through the next steps your business needs to take. Choosing a local accountant, who gets to know your business and industry well, can be so much more than just managing your books.

3. Always on-hand to listen to any concerns

Finally, having a close relationship to your accountant will only become more and more important over the coming months. With talks about a second wave and other concerns, talking with your accountant can help provide you with ease of mind and come up with a plan and forecast for future action.

Personal accounting specialists – Kirkwood Wilson

At Kirkwood Wilson Accountants, we aren’t just your local accountants, but are here to support you every step of the way through these unprecedented times.

If you fancy a chat or to understand more about how we forge close relationships with clients, contact us today.