Here's Why You Need To Change Accountants

There are plenty of reasons why you might be looking to change accountants. Perhaps you feel that you are not getting the level of service you deserve, your current accountants do not offer a cloud accounting solution, or they are not able to deal with the national move to Making Tax Digital (MTD). Whatever the case may be, there are certainly things to consider when you decide to cut ties with your accountant.

Your accountant is a key player in the functioning and profitability of your company. Apart from managing your accounts, they will also make sure you are tax compliant and operating as tax efficiently as possible. The majority of VAT registered businesses with a taxable turnover above the current VAT threshold (85,000), are obligated to keep digital records of their accounts. This is where your accountant should step in and offer cloud accounting software that is compatible with MTD.

 

According to SAGE, only 10.5 % of  accountancy practices were prepared for MTD at the end of 2018 and only 25 % say they have not started the onboarding process. And with the clock counting down, many business owners will find themselves struggling to find accountancy practices that are prepared for MTD, before the deadline. This will vary depending on when your VAT period starts, but as it stands, this will be the first day of your first tax return period after April 2019.

 

You should make sure that your accountant has a MTD strategy in place, are they preparing you for the digital adoption? Do they have MTD compatible software? These are all questions you should ask, and your accountant should be able to provide you with the answers. If this isn’t the case, then it is time to move on and find an accountant that can offer the support and expertise that you deserve.

 

One of the main reasons people hesitate before changing accountants is the mistaken belief that it will be a complicated, laborious process. The process of changing accountants should be straightforward however, and providing your business is running as it should be, there shouldn’t be any disruption to your business.

Informing your accountant that you will be moving elsewhere is the first thing you need to do, as you’ll need to grant them permission to speak to your new accountants to handover paperwork. Ideally this process would take place when there is as little activity happening as possible, during a quieter period, but as is the nature of business, this can sometimes be unpredictable so is certainly not a requirement. You should also ensure that all loose ends are tied up,  bills paid, and that all financial responsibility has been discharged. 

 

Two formal letters will need to be sent, the first, a disengagement letter that is a professional document from your current accountants that provides key dates and information of your accounts. The second document is a professional clearance letter, that your new accountant will need to send to your previous accountant asking for professional clearance and requesting any paperwork. These documents are formalities that precede the final step of assigning authority to your new accountants, which will enable them to file taxes on your behalf.

 

 

At Lite Tax, we keep things simple for you, minimising the disruption to your business and making sure that you are always kept up to date with the latest developments in tax. We are always at hand to answer any questions you may have and provide you with the knowledge and confidence that by changing your accountants you will be benefiting your business.

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Surviving the First 90 Days as a New Business

Surviving the First 90 Days as a New Business

In a dream scenario, three months would be all it takes to set up and start running a successful business, the reality is that it often feels like survival and nothing more. It is important to remember that success takes commitment, time , and knowing how to move on from failure. With that all said, here are some simple, effective ways that you can survive the initial ninety days following the initial move into business ownership.

 

 

Get an accountant to set up your books

Having an accounting software system, such as Xero, will ensure that your finances and customer accounts are tracked and systematised, which avoids many problems later on when it comes to gathering the data. Getting an accountant to help you  will give you the peace of mind when it comes to submitting your tax return, and allow you to focus on your business during this crucial point.

 

Delegate where you can

Family and friends may be your only support at the beginning of your business venture, perhaps they helped you out with the initial financing, joined in with the labour, or helping with the thousand and one things that needed to be done  It is also just as probable that you will find yourself taking on multiple roles, working all hours, and jumping the many hurdles that you come across during this often bumpy period of starting your business from scratch. 

Even with the most careful planning in the world, you may still find yourself struggling to get by day to day, unable to see beyond the next couple of weeks, let alone months or years. Surrounding yourself with a good support system early on will allow you to move your business forward. During the initial start-up period you may not have the spare liquidity to take on a team, but it is worth delegating where you can, on a part-time basis if necessary, which will take some of the workload off of your already burdened shoulders.

 

 

Acknowledge your weaknesses

Doing everything yourself may give you a feeling of control, but that will only last so long before you find yourself completely burnt out. And as your business grows, knowing where your strengths and weaknesses lie, and where you need to place your focus, will allow you to build on the areas that may set your business back. Looking to the future by planning the first 90 days of your business will allow you to focus on achievable goals, that will in turn help drive you forward to your long term goals.

While there is no foolproof plan to secure the long-standing health of your business, there are certainly things you can do to give your business the best possible chance of success. The best take away would be to start with a good budgeting and marketing strategy, have a good accountant who can help you avoid the many financial pitfalls of new business, and make sure to utilise the support available to you, either in the form of handy software or tools, or by delegating tasks to someone else.