By Russell Smith
As a self-employed individual, you carry a lot of responsibilities that members of the traditional workforce don’t. What those responsibilities are can vary from job-to-job, depending on what line of work you are in, but one thing every self-employed person has in common is dealing with finances. For some, finances are organized, well-looked after, and of little concern, but to others they are confusing, the bane of their entire existence and a liability to their business. Sometimes, though, it can be hard to tell which side of that line you are on; if you are coping well with your finances or not. To that end, I’ve come up with a quick guide of five warning signs that mean you’re in need of an accountant, to help you work out whether or not you need help.
It Takes Up Too Much of Your Time
Doing your bookkeeping, juggling tax deadlines and working out the money you owe can absorb a lot of time, especially if you don’t have any experience in doing your own finances. If you find yourself spending hours trawling through your records, reading over government letters or trying to work out the numbers, chances are you need an accountant. The last thing you need when running your own business is losing time to tasks other than work-related projects such as delivering to your clients or finding new opportunities to expand. If this is happening to you, my advice would be to leave it to somebody else and concentrate on what is most important to you, which is the success of your business.
You’re Concerned About Upcoming Tax Deadlines
These deadlines aren’t set as traps to catch you off guard and lead you down a road of fines and court dates. No, they are simply there to make sure you know when your taxes need to be paid. If you are fearing upcoming deadlines, chances are that you are not in good control of your finances and may incur penalties. Missing deadlines and having to deal with those ramifications is not only bad for your business, but also your stress levels. If this sounds like you, make sure you find support before it’s too late.
You Don’t Understand the Jargon
If you have experience dealing with the IRS, sorting your taxes is a snap. However, if you don’t, it can be a minefield of confusing statements and phrases, unclear instructions, and a maze of possible tax avenues you may or may not need to pay. If you are left confused and/or frustrated by the information about your responsibilities as a business owner or self-employed individual, get some expert help. Even if it is just for advice.
You Don’t Know How Much Tax You Owe and When or Where to Pay It
Self-employed people that don’t understand the tax system often end up paying more tax than they were supposed to. Accountants can not only assist you when working out what it is you need to pay, and who to, but also by looking at deductibles and ensuring you don’t pay a penny over what you are supposed to. Even if you do know exactly what you have to pay, it can be confusing trying to work out which tax codes you fit in and where to send money.
You Are Being Audited
This is an unlikely scenario for individuals running their own small business; however, it is not impossible. In the event of an audit – otherwise known as a tax compliance check – every dealing you have had with the government and your clients will be scrutinized. Any mistakes then, need to be dealt with before greater penalties are incurred. Having an expert on hand to worm out any discrepancies is absolutely vital when undergoing this process.
Your Business Is Quickly Growing
Managing finances is a vital part of running your own business and for many small earners or part-time self-employed, finances are a doddle. However, as your business expands and you have an increased amount of deductibles, assets, and varying sources of income, having an accountant on hand to help ensure all the finances remain above board is an important part of enabling growth.
Russell Smith is an experienced chartered accountant with over a decade of experience running his own business.