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Don’t wait until the tax return to talk to your accountant

Summary:

 

1. Benefits of hiring an accountant

2. Ask your accountant questions

 

 

You might see this as further expense, but hiring an accountant during the financial year could benefit you more as an accountant can advise you on how certain expenditures will impact your accounts and final tax bill.

 

For example, you might want to entertain staff or customers, but each of these has different tax rules. It is better to understand the rules before incurring the expense. Entertaining is an important aspect of growing a business and keeping morale high; we are not saying to avoid spending money on this, but be aware of the impact it has on your profit and taxes for the year.

 

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1. Benefits of hiring an accountant

 

There are other benefits to hiring an accountant, and these will depend on the size of your business. Many accountants work with several clients in various industries with particular requirements and issues. Therefore, your accountant's experience with a variety of clients could benefit you.  

 

Let's say you travel for work often, stay in hotels a majority of time, and this negatively impacts your cash flow. Because you are so ingrained in the business, you do not have time to think or to plan. Having a chat with your accountant, he may advise you to open an account with a national hotel chain and this account is likely to include a discount. The benefit here is you no longer need to pay for hotels in advance, but payment is made 30 to 45 days later depending on the booking. Because you have a hotel account, you may receive a discount or beneficial rates which reduce the cost of hotel stays and improve your profits. Ultimately, this means more money in your pocket.

 

We understand that as a business or sole trader you want to reduce your tax liability, but to do this you need to plan, and the best way to plan is to discuss your thoughts, needs, etc. with an accountant. Waiting until you need to submit your tax return is too late. Talk to an accountant during the financial year.

 

2. Ask your accountant questions

 

Also, ask your accountant questions. Why? This is a great question. One client of ours was told by her previous accountant to pay her tax return on a certain date and the amount in which to pay. She did not understand why or what she was paying until we broke it down for her. Remember, this is your personal money. Yes, trust your accountant, but also ask questions.

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