Have you noticed that people who have a lot of money tend to hire accountants? A big part of the reason for this is that those accountants actually save them money. Hiring an accountant can benefit your finances because they can help you to pay less tax. They can also help you to find better ways of saving the money you already have, and highlight areas where you may be wasting money on loans or other financial agreements. After all it’s not like money grows on trees or flows freely from ATM machines.
Accountants are particularly beneficial for people who are self employed, because they can help you to save money on your expenses, and cut the tax that you pay. They can offer advice on depreciation, allowances for your car or other day to day expenses, bills, charitable giving, and other areas where you may not think to cut your contributions. If you’re not particularly good at record keeping, then an accountant could help you by giving you advice about the best way to prepare your accounts, so that you don’t end up getting fined for poor record keeping or incomplete accounts.
Accountants and bookkeepers are very different things, and this is one issue that a lot of people fail to understand. A bookkeeper does basic preparation – logging income and expenditure into accounts software or preparing your accounts as a spreadsheet. An accountant will look things over in a more detailed way, and will provide you with audited accounts if you need those for any specific projects you are bidding on, for grants, or for benefit applications.
Preparing your own accounts can be intimidating, and sometimes it makes sense to hire an accountant just because they can do it more quickly. Why waste your time (which is worth money), when you can pay someone that can do the job quicker, and without errors? If you have an accountant do the work for you, and they make mistakes even though you provided them with accurate information, then you may be able to claim against them because you acted in good faith and they were the one that was somehow negligent. It is rare for a fully qualified accountant to make mistakes, because they spend years being trained in workflows that have checks and balances that will ensure the accuracy of their work. If you work with your accountant, build up a relationship with them, and follow their advice, then your annual financial reports will be far less stress.