With development of digital assets like accounting software, accounting has become a relatively easier process to follow. Now a days, self-employed people such as contractors prefer managing their accounts by themselves via data feeding to applications. This results in automatic computation and the user gets a confidence that he is able to manage his books of accounts by self. However, solution itself is not encompassing and services from an accountant for contractor becomes essential. Some of the key reasons are:
- Latest Updates
We are all aware of the fact that the tax implications are dynamic in nature. The rules and policies keep on changing as and when required. Being solely dependent on software make a person prone to errors as the application may take time to roll out an update or may not support the latest computation method at all. An accountant can easily adapt to new rules and ensure that they are followed from the first day of its applicability.
- Valuable Advice
An application can only do tasks that are allocated to it. It doesn’t have its own thinking ability to help contractors with better suggestions. This is where many people end up paying more tax as they are not updated with latest scope of available deductions. Think of the software as a car, they can help you cover long distances quickly, but an accountant is like a driver who knows where to take turns and which route will help you reach faster.
- Consultation & Financial Planning
There are several applications who brag about offering consultation to its users. But the question is – how can one offer advice without listening to the problem? Applications have some preloaded questions that are common in nature. It throws up the same information every time someone seeks advise. Accountants on the other hand, guide you through a custom channel which involves discussions on your financial sources, your goals and your existing dues. Post considering various aspects of financial dealing, they offer you advise that is to the best of your interest.
- IR35 Rule Applicability
Ever since IR35 was introduced, contractors are perplexed about its applicability. Whether they fall under IR35 or not depends on the terms and conditions of the work with the organization. The best resource to judge the status is an accountant. Wrong treatment of income can also attract penalties; hence, correct identification is essential.
- Is Hiring An Accountant Expensive?
There is a common misconception among people that accountant for contractors is expensive. When considered from the viewpoint of value addition, the cost is very much affordable. A wide range of activities such as maintaining books of accounts, handling taxation, financial planning, tax planning, etc., are executed with utmost professionalism. Added to it, time to time consultation is always a part of the relation which help contractors reduce their tax burden and accumulate long-term gains.
So, the next time one thinks if it is worth hiring an accountant, do recall the fact that it is not only about making entries into the books of accounts. It goes beyond recording transactions and covers a bond of trust that helps you achieve better financial outcomes in the years to come.