Setting up as a sole trader: Part 4 – Why you need a great accountant

02 October 2017

Making a success of your sole-trader business isn’t always an easy task. But with the right research and finance know-how, and a solid focus on planning and performance, you can make your journey a whole lot more efficient.

We’ve outlined how to get the basics right and why you need to stick to your business plan.

But there’s another element to add into the equation too – to really get your sole trader business firing on all cylinders, you need a GREAT accountant to help you with those numbers.

Work with a great accountant

Having a good accountant on your side does make a huge different when you’re a self-employed business owner. Ultimately, there are two very good reasons for having a professional to work with you on your accounts, key numbers and tax returns.

  1. You’re unlikely to be a finance expert, so having the knowledge and experience of a qualified accountant on board makes a huge difference to your financial management.
  2. As a sole trader, you only have so many hours in the day to get everything done. Delegating some of the finance chores to an expert frees up your time and gets you back out there doing what you do best – working with your customers.

When you’re still in the early days of your business, you may think you can’t afford to hire an accountant. But a good accountant will actually pay for themselves – by helping you get more control, create more efficiencies and bring in a better profit.

They’ll help prepare you to do business, improve the way you manage your customers and can help you get access to the money you need to buy new gear or grow the business.

Hiring an accountant is a solid investment in your future success.

Opt for a chartered accountant

There are a LOT of accountancy firms out there to choose from. But we think there’s a real advantage to choosing a chartered, qualified accountant.

To become a chartered accountant, you have to have a licence from one of the four accounting industry bodies. What that does is make practitioners accountable and answerable to their industry body. In other words, as a client, you have a right of complaint.

If an accountant isn’t chartered, you don’t have that right. Their practice could fold and go bankrupt and you have no comeback. There are good accountants out there who are not qualified and have lots of life experience. But if you want real reassurance and security, you need a chartered accountant.

Don’t go for the cheapest firm

Some accountants will have a low price, but will offer the real basics. A cheap price looks inviting at first (particularly in your early stages of trading) but you will get far more for your money if you spend a little more in fees.

Engaging a more forward-thinking accountant will be more expensive, but they’ll offer your business far more support and advice. And that’s advice that will, ultimately, help you grow and make better profits.

Get back money you spend on an accountant in the value they deliver.

Go for the proactive business adviser

What you definitely DON’T want is an accountant who does the bare minimum – someone who does your accounts, fills out your tax return and doesn’t call you for another year.

Look for a proactive accountant who looks at the drivers in your business model and helps you get more from your skills – and not someone who’s  just ticking the compliance boxes. By working with the right business adviser, you get the benefits of all their experience, all their knowledge of your industry sector and all their financial know-how.

In a nutshell, you get incredible insight into how to make your business better.

And with a system like Xero online accounting software in place, your proactive accountant can also help you set up budgets, manage your cash flow and track your key performance indicators (KPIs) to keep you on track with your plan.

Get your 3 key stages right and turn a profit

We’ve reached the end of our four-part series on running an efficient and profitable sole-trader business.

If you get these three key stages right, you’ve set foundations that will stay rock solid throughout your business journey:

  • Research and finance – do your homework, get set up properly and use Xero accounting software to manage your finances.
  • Planning performance – make a clear budget, set your profit targets and stick to your plan, no matter what.
  • Support and insight – work with an accountant who has the experience, knowledge and insight needed to push your business further.

This business is your baby, so you need to look after it. And an accountant with the right mindset will add incredible value for you as a business owner.

Who are FD Works?

FD Works are strategically located between Bristol and Bath. Our team of accountants, business advisors and Xero specialists offer hands-on finance support and FD-level strategic advice.

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