A successful enterprise usually focuses on its main business rather than hiring additional employees and adding additional processes that are not related to the main business processes. Accountancy is one of these processes. So, instead of wasting money and time on accountancy services, enterprises usually hire accountancy service companies to accomplish services like payroll, bookkeeping, collections, and other accounting processes. This helps enterprises to save time and money that is better invested on their core business activity. So, what does accountancy service actually mean? Why it’s essential for business? How much does it cost? And what is included in accountancy service? That’s what will be explained in this topic.
So, what does accountancy service actually mean? Why it’s essential for business? How much does it cost? And what is included in accountancy service? That’s what will be explained in this topic.
What is accountancy service?
Accountancy is the process by which accountants run different processes in order to provide an overall feedback on the financial situation of the enterprise. This feedback is reported to management to help them making the right decisions. Accounting processes include the following:
This process involves the recordation of repetitive business transaction and non-repetitive business transactions. Repetitive transactions include issuing customer invoices, receiving cash from customers, paying invoices of suppliers, and paying salaries of employees. Non-repetitive transactions requires the use of journal entries, acquiring a new asset is such an example of non-repetitive transactions.
The classifying process comes after recording transactions, the recorded transactions are accumulated then classified at a general ledger. The general ledger includes separate accounts, each of them contains information related to a specific transaction such as sales, accounts receivable, accounts payable, depreciation expense, and so on. Totals describe the ending balance of each transactions, these balances could be adjusted with adjusting entries if there were expenses that are incurred but not recorded yet.
There are two types of reporting depending on the area of specializations. In financial accounting, the accountant will be responsible for providing financial statements based on Generally Accepted Accounting Procedures (GAAP), these financial statements describes the financial situation of the enterprise. In management accounting, a cost accountant and a financial analyst report the result of the business to management to help them make accurate decisions.
Why accountancy service is essential?
Financial management is one of the main factors that could lead businesses to progress or to failure. But, there are many business owners who decide to perform financial management by their own without getting help from a specialized accountant. However, they also couldn’t do it as well as accountants. A professional accountant provides business owners with essential benefits they couldn’t have without him. These benefits include the following.
Saving time & energy
Time is money. When it comes to accountancy services, it is a waste of time and energy to do it yourself rather than hiring a professional accountant and focusing on your own business. Instead of thinking about what you will pay to an accountant, think about the result of wrong decisions that would be taken because of mistakes in financial management. A professional accountant will help you to avoid losses as well as saving your time and energy.
Planning for the future
As a business owner, you are focusing on day-to-day operations. But, accountants have the big picture. An accountant can get past months reports and discuss it with you to help with planning for the future. For example, he can tell you about the best time of the year to buy inventory at cheapest cost, this will provide you with a competitive advantage over competitors and supports your business longevity.
Avoiding an Audit
All businesses are audited to make sure that there is no mistakes on tax forms and other accounting procedures. Ifthese mistakes were found when the business is audited, it could be punished. So, hiring a professional accountant is essential to provide you with guidance in order to avoid an audit.
Making real-time decisions
When business owners think about hiring new employees or purchasing new equipment, they don’t know how much these decisions could affect the budget. A collaboration with a financial advisor will help to control your business budget and give you a complete knowledge about cash flow on a regular basis. So, your decisions would be taken on time without fearing their consequences.
How much does it cost?
In UK, the number of accountants has increased and online bookkeeping has become too popular. For so, the cost of hiring an accountant has decreased. In fact, there is no specific rate for accountants, the prices vary according to services required. That means accountants are not paid per hour, they are paid per services provided. Different services charge different rates.
If you are a contractor, the related accounting services will charge you from £50 to £150 per month, the covered services include filling VAT forms, having accounts done, filling with Companies House, payroll, and bookkeeping.
If you are a business partner, the same accountancy services that are provided to the contractor are covered instead of filling with Companies House because partnerships are exempted from such task. The rate could be from £30 to £130.
Landlords pay a higher rate, but this rate also depends on how many properties you own. The rate ranges between £100 and£175 per month.
In the case of limited companies, accountants provide services like Companies House submission, Payroll, bookkeeping, self-assessment, preparation and submission of business accounts, and VAT returns. The rate vary according to the size of the company. It ranges between £100 and £1000 per month.
What is included in accountancy services?
Instead of hiring a number of employees to perform separate accounting procedures, a professional accountant will handle all of these tasks more efficiently. The accountancy services that are provided by an accountant include the following.
Accounting & Auditing
They are the major services provided by accountants, accounting include tax returns preparation, tracking revenues and expenses, and provide financial statements. By auditing, accountants stop fraudulent acts inside the company and also provide reports that help with long-term planning.
This is the process of recording the different business affairs and then report these records monthly, quarterly, or annually. These records include taxes, billings, general ledger, bank reconciliation, and payroll records.
Tax planning is the process of keeping up with tax regulations. This process is performed by accountants to help enterprises meet financial deadlines to avoid penalties in addition to taking advantage of tax incentives.
Accountants are skillful at evaluating the business environment and the financial situation of the enterprise. This ability enables them to provide advisory services to management to identify business gaps, modify wrong strategies, and prepare for the future.