Darlington based insolvency specialists, Business Rescue Expert, explain how to give your new business the best possible start by using the services of a qualified accountant.
Setting up a business today definitely bring with it some risks. The cold reality is that at beginning of 2018, half a million UK companies started the year in what would be considered significant financial distress. The figure is 10% higher than the previous year and demonstrates the risks associated with owning a company.
Starting up a business requires those involved to understand a variety of business functions and one of the most important to grasp is accounting. It’s important to know the basics of how finance functions within your business to make sure your company doesn’t fall into tax arrears. It’s crucial to make sure all tax payments and returns are complete and delivered on time. Also, you’ll need to produce a realistic budget, detailing previous history and forecasts for your business. Without this kind of budget planning you may fail to make repayments back to suppliers and lenders. Also, mistakes when submitting taxes can result in financial penalties, further affecting your startup company.
During the early stages of your business, a qualified accountant can provide key advice for your business and, crucially, they can assist in making decisions that will maximise your profits. The correct accountant will guide you through the financial section of starting a business and they’ll outline a sensible business plan.We would also recommend speaking to peers within your industry as to the particular sector.
Correct advice is absolutely critical during periods of growth for your company and your business can also benefit from the advice regarding business funding and any finance options that are available. As well as the financial reports that indicate how your company growth should be handled, they could have further insights into alternative opportunities.
In several cases, a company will face cash flow issues at the beginning of its life. A good accountant can help lessen the problems and also identify any methods to bring the finances under control. Crucially, in the case of insolvency, an accountant will work with the insolvency practitioner to provide details on the financial issues the business has faced. Importantly, they’ll work to come to a solution that could even result in a business being rescued and then rejuvenated.
Essentially, if needed, an accountant can take control of your accounts and any finances for your new business. In the rare case that they file the wrong information, you may need to seek further advice. For example, it’s crucial you submit VAT and PAYE on time and business owners who suffer this fate will likely attempt to point all liability towards the accountant. However, it’s important to remember that HMRC may not take this view.
It’s part of your owner/Director duties to ensure the accuracy of your accounts. The accountant is an agent for your business but the legal responsibility lies with you.This is why the company will be responsible for any taxes, fees or financial penalties. If this does happen and you fail to make repayments, HMRC can move to close down your company. We suggest contacting HMRC immediately to inform them of the situation. In many cases, they may be able to extend the payment deadline or negotiate a time to pay arrangement.