When people think about business growth, they often picture getting more customers, launching new products, or opening extra locations. These are all important steps, but there is another key factor working quietly behind the scenes: accounting.
So, just how can accounting help a business grow further?
In short, from managing cash flow and identifying cost-saving opportunities to forecasting growth and ensuring compliance, accounting helps set the stage for long-term success.
Research conducted by Intuit Quickbooks has found that SMBs (Small and Medium-sized Businesses) using professional accounting services experience an average revenue increase of 11.5%, compared to those that don’t.
Good accounting is a strategic tool that can drive a business towards greater success.
We’ll explore the many ways accounting can help a business grow further and achieve long-term goals in this post.
1. Improved Financial Clarity
A clear financial plan is essential for the growth and success of any business. It’s about understanding your budget, managing financial obligations, and forecasting both future revenues and expenses.
While this might seem overwhelming at first, having a well-organised financial strategy can be the difference between thriving and struggling.
Accounting plays a clear role here. The Intuit QuickBooks study from above found that 73.1% of small and medium-sized businesses reported improved financial reporting after using professional accounting services.
This improved reporting can give business owners a clearer picture of their company’s financial health, making it easier to spot opportunities, address challenges, and make data-driven decisions.
Reliable financial reports and analysis help business owners make informed decisions, answering critical questions such as:
- Can you afford to enter a new market or expand your operations?
- Is it time to purchase new equipment or hire more employees?
- Should you invest in a new marketing campaign or invest in product development?
Leveraging professional accounting helps you gain the financial clarity needed to make key business decisions, which align with your long-term business growth goals.
A clear financial plan helps businesses understand their budget, manage financial obligations, and forecast future revenues and expenses.
2. Cash Flow Management
Cash flow issues are a common reason why businesses struggle to grow, with 82% of businesses failing as a result of poor cash flow management.
As businesses expand, expenses naturally rise, whether it’s for inventory, staff, or scaling operations. But without effective cash flow management, these growing pains can quickly turn into major setbacks, hindering growth or even threatening the survival of the business.
The Intuit Quickbooks Accounting For The SMB Economy survey found that 71% of respondents agreed that professional accounting services improve cash flow management. Accountants provide essential tools and strategies to help businesses maintain a healthy cash flow.
This includes identifying areas to reduce costs, checking that you’re fully leveraging available tax relief, and exploring additional funding options such as grants or loans.
Accountants also provide accurate financial forecasting and bookkeeping, giving you the clarity to plan ahead, avoid cash shortages, and keep your business running smoothly during growth.
By managing cash flow effectively, you guarantee your business has the funds available for reinvestment, empowering you to scale confidently and stay on track for long-term success.
3. Maintaining Compliance
Staying compliant with regulations is essential for UK businesses, and accountants play a vital role in ensuring businesses meet these requirements. Staying compliant allows business owners to focus on growth without legal issues or potential penalties.
Accountants can advise on the most suitable legal structure for your business (whether a sole trader, limited company, LLP, or partnership), guiding you through the tax and liability implications.
Once the structure is chosen, accountants assist with company registration at Companies House and ensure you’re properly registered with HMRC for filing corporation tax returns.
For businesses with a VAT taxable turnover above £90,000 in the last 12 months, accountants also handle VAT registration, maintain accurate records, and check that VAT returns are submitted to HMRC.
Additionally, accountants support payroll management, pension contributions, and PAYE registration, helping businesses meet their tax obligations and legal employment requirements.
Outsourcing these critical compliance tasks helps businesses avoid penalties, so owners can focus on strategic decisions that fuel growth.
Accountants can advise on the most suitable legal structure for your business (whether a sole trader, limited company, LLP, or partnership), guiding you through the tax and liability implications.
4. Strategic Tax Planning
Strategic tax planning is an essential service accountants offer that can significantly drive business growth.
Closely analysing a company’s financial situation allows accountants to identify opportunities to minimise tax liabilities and maximise savings. They help structure transactions in a tax-efficient manner, like timing income and claiming expenses to optimise tax benefits across different periods.
Accountants also identify available tax reliefs and allowances specific to your industry, ensuring you take full advantage of all potential savings.
Beyond immediate savings, accountants assist businesses in developing long-term tax strategies that align with growth goals. Whether it’s advising on the best business structure or identifying tax-deductible expenses, their expertise ensures you are positioned to reinvest savings into key growth initiatives, like expansion or product development.
Additionally, they’ll stay on top of changing tax laws, so your strategy is always up-to-date, helping you avoid costly mistakes.
Accountants help structure transactions in a tax-efficient manner, like timing income and claiming expenses to optimise tax benefits across different periods.
5. Improved Access To Capital
Securing the right funding is often a crucial step in achieving business growth, but it can also be challenging.
Research from Swoop Funding claims that 68% of businesses find funding as a major barrier to business growth. This is where an accountant can be invaluable.
By conducting thorough financial audits, accountants can assess your financial health and identify funding options that align with your current needs and long-term goals.
Whether you need working capital for day-to-day operations, funds for research and development, or expansion capital to scale your business, an accountant can guide you through the available options—ranging from short-term loans to venture capital and grants.
Additionally, accountants can help you prepare compelling business plans, accurate financial statements, and well-thought-out financial projections, which will strengthen your case when approaching investors or lenders. Their expertise ensures that you present your business in the best possible light, ultimately improving your access to the capital you need to fuel growth, enhance cash flow, and drive your business forward.
How We Can Help
So, how can an accountant help your business grow further?
By offering expert advice on managing finances, optimising cash flow, maintaining compliance, and identifying tax savings, an accountant becomes a vital partner in driving your business forward.
At Lumin Accountancy, we provide tailored support to businesses of all sizes, helping you grow and succeed with confidence. Let us handle your financial strategy so you can focus on what truly matters – scaling your business.
With offices in Swansea and Ystradgynlais, meet our team and take the first step towards financial clarity and success.
Want to know more? Contact us today and let’s talk about your business goals.
