Historically, accountants have only been called upon to assist in the year end compliance work, i.e. to prepare the yearend financial statements and to assist with the corproate and personal taxation affairs. Times have changed and so has the role of the accountant. Your accountant will now offer a vast range of different services including:-
i) Management accounts
Management information is a key feature required to run a business efficiently and control the business’ finances and one of the best ways of doing this is using management accounts.
Management accounts typically comprise of a profit and loss account, a balance sheet and a cash flow, all of which are used to assess the financial performance of the business during a specific period and the financial position of the business at the end of a specific period. This information can then be used for forward planning or to identify areas where things are not going to plan so remedial action can be put in to place to mitigate the effects.
ii) VAT services
At first glance VAT appears simple and straightforward, however there are often ‘funnies’ that arise making it highly complex. VAT rules and regulations often changes as do the treatment of specific things and it is important to keep abreast of these to ensure the business doesn’t fall foul of the rules. The consequences for erroneous VAT Returns can be severe, penalties can be large and interest can soon add up.
Because of the pitfalls associated with erroneous VAT Returns it is worth outsourcing the function to someone who is experienced, knowledgeable and up to date with current VAT rules and regulations, as well as how to treat specific items. These VAT services are provided by many firms of accountants therefore if assistance is needed with VAT affairs your local accountant should be your first port of call.
iii) Payroll accounting services
Running a payroll department will often take up a fair chunk of time, even when there are few employees. In addition, you will need the technical knowledge associated with calculating the payroll as well as the ability to process it on a payroll package.
Many accountancy firms offer payroll accounting services, whereby they will obtain all the relevant information, process the information and generate all the relevant management reports, advise how much to pay to each employee, advise how much needs to be paid over to HM Revenue & Customs and arrange the funds to be transferred over electronically. The firm of accountants will take full responsibility of the payroll and will ensure it is done quickly, efficiently and accurately for a small fee, of course.
iv) Insolvency services
If the business hits hard times and there is no other option but to put it in to formal administration there are many accountants that will provide this service and assist in the formal winding up of the company, and settling all the outstanding debts, as far as possible.
Alternatively, you may find that a company you have a trading relationship with has hit times and is forced in to administration. In these circumstances the insolvency department will fight your corner and help ensure you get any amounts owed to you and your company.
v) Corporate finance services
Corporate finance is a specialised area and wide encompassing function that includes things like preparing cash flow forecasts and financial projections, preparing business plans, assisting with funding applications, business disposals, business acquisitions and business valuations amongst many other things.
vi) Small business bookkeeping
A firm of accountant will provide full book keeping services for its clients, which includes maintaining the sales ledger, maintaining the purchase ledger and maintaining the bank control account. Many accountancy firms will offer book keeping services as an online accounting service.
The above shows the wide variety of services many good accountants now provide. Whilst the most common types of services are noted, the list above is by no means an exhaustive list and your local accountant may provide even more services. It is clear to see that the role of accountancy has changed vastly and the modern day accountant is now a business adviser who will still be able to deal with the compliance work and assist you and your company with the year end accounts and tax affairs but also help with other aspects of the business.