How Important Has Having an Accountant Been for Me?
September 1, 2015 | By Nimbus |
This article details the development of Brighton-based SEO and entrepreneur, Tom Clark, who is currently running Convert Digital amongst other online projects. He discusses the integral role having an accountant has had on his personal finances and the power of thinking bigger.
Who are accountants for?
I had always considered accountants to be a service for ‘big earners’ or large companies that simply wouldn’t be able to keep track of their finances without a helping hand. At the beginning of 2014 I had decided that I would take the leap from working in a web agency, to starting my own SEO business. My perception was that a ‘small player’ like me wouldn’t need an accountant if I do decide to go solo, but it would soon become clear that this was a naivety on my part.
What if you have or plan to have more than one business?
Being involved in SEO naturally lends its self to wanting to start sideline projects, as you become aware of online opportunities all the time. I was already running another online and offline business, Your Guitar Tutor, so I did have my concerns on how I would keep track of all my finances, what tax I would owe at what time and I didn’t even understand about different company formations. Through a friend, I was introduced to Nimbus Accounting who took the time to understand exactly where I was at and where I planned on going.
What’s your vision?
For me, the real value of my initial meeting was not only in understanding why Convert Digital should be a limited company, but also why I need to consider my future. At age 24 you don’t typically do too much thinking about the next 10, 20, 30 to 50 years of your life, but this process made me think.
I had always gone along with the mindset that if you can pay your rent, afford the food shopping and get by, you’re doing just fine. Of course this is true, but what if something goes wrong and you lose your job and have no savings? Essentially, I began to realise that I need to be saving and understanding what I am doing with my money. As time went by and my relationship with Nimbus grew, I learnt another very valuable lesson about leveraging your money.
Do what you do best
One of my biggest realisations has been that you need to know when to ask for a helping hand. If you are worrying about if you are calculating your tax bill properly, over-paying or not being efficient enough, then you are taking your attention off the most important thing, which is your business.
Working with these guys has allowed me to do what I do best and not feel fretful about the finance side of the business. When things that impact me change in the financial world, I am made aware, instead of having to routinely checking online.
Xero – know exactly what’s going on
Nimbus set me up with Xero cloud accounting, which has been an incredibly powerful tool for me. This tool essentially shows me at any time what money has come in or out of my business account. I check in every week and make sure the items are reconciled, meaning matched up with the correct code (sale, dividends, entertainment with a client etc) so my accountant can make sure everything will be prepared for year end. I can keep track of which clients are behind on their invoice payments, which pay on time and find value in understanding my customer base in this way.
Helping you with more complex arrangements
When it comes to more complex deals with clients, Nimbus stepped in to consult with me on the various ways I can set up my involvement with other companies.
I planned on offering my services to a client in exchange for 10% of profits and 10% of the exit of the business. I didn’t understand how many different ways this could be arranged, but also how important it is to understand what the different setups will mean for me. Nimbus even held a conference call with my client to discuss the various ways we can go about setting the deal up, so everyone is comfortable. This input has been invaluable and developed me a lot in the past 20 months.