23 Aug Do I need an Accountant if I’m using Xero?
As much as we love Xero, yes you do! Don’t be fooled – it’s great software but it doesn’t replace professional advice!
You may expect us to say that because we’re accountants but here’s a few reasons why we strongly advise that every business owner still needs an accountant, even if they’re using fantastic software such as Xero.
1: Software is a tool. It automates labour intensive tasks, enabling the user to perform specific tasks far more efficiently. It doesn’t replace the knowledge of a highly skilled bookkeeper or accountant. The software relies on the user entering data correctly and it doesn’t identify errors made by the user. Mistakes happen, it’s human nature but mistakes can sometimes be costly, if not identified and corrected promptly.
2: If you don’t understand the purpose of a journal in your accounting records, you probably should leave it to a professional that does. Bookkeeping is a highly skilled job and is far more than data entry. If you don’t understand double entry bookkeeping, you probably won’t understand how to correct any mistakes you make. Journal entries are often required to make corrections to your accounting records.
3: Your accounting software won’t accurately calculate the tax you owe. Various adjustments to the accounts are required to arrive at your taxable profit. This will include adding back items such as personal expenses and depreciation. Capital allowances also need to be considered. These items are adjusted on the tax return. Your accountant will ensure your tax bill is minimised and that everything is claimed correctly.
4: Many small businesses start off with a great idea but lack the financial knowledge required to make good commercial decisions. Many businesses fail due to incorrect accounting data, lack of legislation knowledge, poor advice and lack of expert guidance. Your accountant will be able to support you through all these challenges, ensuring you make timely and accurate decisions to ensure successful business growth – and to keep your business running smoothly.
5: The human touch. People forget that many accountants also serve as business advisers. Keeping your business on track, identifying mistakes and offering support throughout the year whenever it’s needed, are just a few things your accountant can help with. Accountants carry a wealth of knowledge through working with clients from all walks of business. Most experienced accountants will have seen most of the problems and challenges that a business may encounter. As a result, an accountant can provide an unbiased sounding board for your ideas, warn you of potential risks and alert you to any opportunities that you may have missed.
6: Running a business is tough and extremely time consuming. Your accountant should be a partner to your business, taking care of the many financial tasks involved in running your business – reducing your workload and saving you both time and money.
7: Using an accountant that specialises in Xero will ensure that you’re getting the most from the software. They will be able to provide you with training in using Xero but also suggest other add-on applications that will integrate with Xero and automate your processes, saving you time.
8: If you’re looking for financial borrowing, you will need the help of an accountant to support any financial applications such as mortgages and bank loans.
9: Tax laws are always changing. With the full roll-out of Making Tax Digital around the corner, you will need an accountant on side to help you understand and implement the changes.
10: Your accountant will act on your behalf with HM Revenue & Customs. Contacting HM HM Revenue & Customs can be a very time consuming process so your accountant. Your accountant can save you lots of time by speaking to them for you, saving you the pleasure!