You didn’t start your business to be an accountant! You DON’T need to know it all.
So don’t beat yourself up about the fact that you don’t know it all, or feel that you need to spend all hours of the day and night researching and finding things out!
You DON’T need to know it all, especially when it comes to finances and the related legislation.
But you know what?
Your accountant definitely should!
Here are 5 things that you don’t need to know – but need to feel confident that your accountant DOES!
1. Whether it’s more tax efficient for you to operate as a Sole Trader, or a Limited Company
Different business structures have different rates of tax, and different allowable expenses.
So, depending on all manner of factors, such as your turnover, your profit, your industry, your personal circumstances with other employment etc, what works in terms of business structure for someone else may not work for you!
Your accountant should be clued up on this, asking you the right questions to get to know your business, and advising if and when it’s a good time to change your structure
2. What and how much you should be claiming as Use of Home and Travel expenses
As a business owner, it’s highly likely that you both work from home from time to time, and travel to meet clients, or to training or networking events etc.
There are many and varied rules regarding what’s allowed to be claimed on your tax return, so, guess what – your accountant should be knowledgeable on this and proactively checking you’re claiming all you’re entitled to!
3. When your various taxes are due to be filed and paid
As you grow, the more your tax responsibilities will grow (this is a GOOD thing, by the way!).
But you’ve got enough on your plate to be remembering without piling on extra deadlines and dates things need to be done by etc.
Your accountant should warn you well in advance of deadlines, and send little nudges and reminders as the dates get closer.
You should NEVER be the one telling your accountant that you have something coming due, they should already know!
4. How much salary you should be taking, and the best salary / dividend mix for you
This applies to Limited Company directors, as you can essentially decide how much money to take out of the business each year.
Before you just say ‘’all of it please!’’, there are many factors to consider, not least of all the amount of tax you’ll need to pay if you do so!
There are also different ways to take money out to make it the most tax effective, so, once again, this should be something your accountant proactively talks to you about.
5. What impact certain decisions would have on your cashflow & profit – eg taking on an employee, or outsourcing to someone
Sometimes, you need to spend money to make money.
And sometimes, it’s best to get yourself into a better financial position before doing so. T
his probably isn’t your area of expertise … but your accountant should have the knowledge and insight to be able to discuss these things with you. (For example, during our Growth Strategy Sessions)
If you have read this list and found that your current accountant may be somewhat lacking, why not book in a chat with us, and let us show you how we can help.
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