The common perception among most people is that chartered accountants like Linghams Chartered Accountants are licensed and highly trained professional consultants who advise large companies on managing their finances and reducing their tax liability. That perception is completely true, but it isn’t the whole story.
Chartered accountants don’t just handle companies’ accounts, and they don’t restrict themselves to working with large businesses and corporations; they work with anyone who needs financial advice or help. Large companies, small companies, partnerships, sole traders and even private individuals with no business interests at all can all benefit from solid, professional financial advice that can significantly increase the health of their finances.
Engaging the services of a chartered accountant is something that any individual or group of individuals starting up in business should consider before they take that step. There are good reasons for this. For example, if you lack experience, you can easily make the wrong choice regarding the legal status of your new business. You may choose to become a sole trader, form a partnership with friends or form a limited company that employs people. Each type of business has its own specific advantages, disadvantages, legal obligations and liabilities, and not being fully aware of them can be a very costly affair. That’s where the expert services of a chartered accountant can be a real help.
A plumber, for example, can very easily set up a self-employed business as a sole trader. It’s a very simple procedure to register as self employed with Her Majesty’s Revenue and Customs (HMRC), and start work immediately. However, if a mistake made by the plumber in a customer’s house causes thousands of pounds worth of flood damage, the plumber, as a sole trader, will be completely liable for compensation. That’s in contrast to a limited company, where liability is limited. A limited company has its own complications, however, and you would need to be well acquainted with them. Similarly, a partnership with friends is also easy to set up, but it carries the risk of major disagreements and bad feeling, especially as a contract made by any one partner will be legally binding on all the other partners whether they agree or not. Knowing your business aims, a chartered accountant can advise you on which option is most appropriate for you.
Chartered accountants are knowledgeable in all aspects of finance. Tax saving is, of course, a very important part of what they do, and they are fully conversant with all types of tax whether it’s income tax, VAT or any other type of tax that you may be liable for. However, they are also fully qualified to provide financial advice on property purchase, equipment purchases, national insurance, raising finance via loans or non-repayable grants, debt repayment, income and cash-flow projections and virtually all issues related to finance.
While most in business regularly employ the services of a chartered accountant, many individuals who aren’t involved in any business dealings also make use of chartered accountants, even if it’s only rarely. For example, buying a house, or spending a large amount of money on an event such as a wedding, a funeral or a divorce are all stressful enough without the added worry that they will involve unmanageable expenses. A chartered accountant will give solid advice on how to estimate the costs that will be involved and also how to minimise and more easily manage them.
As you would expect, chartered accountants charge fees for their services in line with most other professional services. Unlike professionals in many other fields, however, chartered accountants can save you a lot more than they charge. Bearing that in mind, consulting a chartered accountant in any matters related to finance makes good sense.