Many people become freelancers because they want the freedom to earn money doing what they love and to control how they do that. But w...
Many people become freelancers because they want the freedom to earn money doing what they love and to control how they do that. But what many fail to think about are all the other aspects to being self-employed and running your own business.
It’s great to have a passion to sell to others but when the money starts coming in you need to be able to organise your books, keep records and manage your business accounts – and crunching numbers is not everyone’s strength.
So as a freelancer, does it pay to hire an accountant to do this for you, or is that just another costly expense which you can easily do without? To be honest only you can answer that question.
However, in looking at the return on investment from using an accountant it’s important to look at the value which an accountant can bring to any freelance business and not just how much they cost each month.
To give us their perspective we asked our friends from Crunch.co.uk, an online accounting service, and they shared with us ways to get ROI on using accounting services.
- Accountants can help set up your businessIf you are going down the limited company route your accountant can carry out the process and administration required to set up your company, taking the headache of all that paperwork away from you.
- Accountants can save you moneyProfessional accountants understand how all the taxes and expenses work, far better than the average freelancer so they can advise you on what you can and cannot claim for and can show you where you might be able to save money.
- Doing your books is time-consumingWhen you first start out it might seem that your accounts are too simple and straight forward to merit spending money on an accountant, however, as your business grows and you start to get more and more clients, that position will change and you won’t want to be spending all your time recording receipts and keeping books updated – having an accountant to give all of that to can free up your time considerably.
- Completing and filing your tax returnEnd of year tax returns can become a nightmare if you haven’t kept on top of your book-keeping during the year but handing it all over to an accountant to deal with means you can relax, knowing the paperwork will be completed properly and on time. It removes the yearly stress of trying to complete tax returns yourself.
- Regular ongoing business adviceA regular accountant will be able to spot patterns of spending and income within your business over time and will be able to provide advice on areas where you might be able to cut back, should the need arise, or equally if the business is healthy enough to take on new clients and new staff. Accountants can give invaluable advice on the state of your business.
- Negotiable ratesIf you try just using accounting services for the tax season it could end up costing more in one-off payments compared to being able to negotiate more favourable rates if you are working with them on a regular basis. You may able to negotiate a fixed fee or a monthly retainer if you have continuous work with the company.
- Added company credibilityBeing able to refer to your accountant and having an accountant set up your limited company for you adds to the independence and credibility of your business in the eyes of prospective clients who might want to work with you. It shows that there is independent financial review of your business which can help increase confidence.
- Professional expertiseAn accountant will be able to tell you very quickly if your company is heading for financial difficulties or if there are any irregularities occurring in your books, meaning you will have a much earlier warning sign and be able to do something about it. If you are doing your books yourself you are much less likely to have the professional expertise to spot these kinds of issues before they become disastrous.
- Less stress Trying to keep on top of receipts, income, bills and outgoings, not to mention taxes, can be incredibly stressful for anyone who owns a business so instead of panicking and keeping shoe boxes full of receipts, take the stress out of business ownership by giving all of the number work to your accountant.
However, using a professional accountant needn’t cost the earth and there are many advantages to spending money on such a service. From saving you money, to reducing your everyday stress, an accountant should actually be seen as an investment in yourself and your business rather than another cost to avoid incurring.
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