Do I Need An Accountant For My Small Business?

As a small business owner, you can manage your own accounts if you have a solid understanding of finances.

But if you are not confident about managing your books, you should consider hiring a small business accountant with experience in working with start-ups.

Because trying to manage accounts while keeping up with daily business tasks can negatively affect business growth in the long run.

An accountant’s help is not limited to crunching the numbers but will add value in many ways.

Let’s look at the big picture of when and why small businesses need an accountant.

This blog post is divided into the following sections

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Can I do accounting by myself?

Yes absolutely! You can handle accounts if you have a prior experience, confidence and knowledge of doing so.

Small business simply has quite simple accounting requirements, which you can deal with while handling your business tasks.

But accounting is not only about crunching numbers; it takes proper attention to all the business transaction and records, tax filing, regulation, and so on.

So you must be absolutely certain about your ability to do accounts on your own because even a minor mistake can lead you to penalties from the HMRC.

Why small businesses need an accountant?

As a small business owner, one of the best decisions you can make is to hire an accountant from the very beginning.

An accountant will work by your side to take your business to the next level.

Let’s see other reasons why small businesses need an accountant,

Unlimited access to financial knowledge

If finance is not your forte, then it would be hard for you to run a healthy business.

At the beginning of setting up your business, you must decide the business structure, devise a business plan, prepare a cashflow forecast, set up payroll, and the list goes on.

An accountant can point you in the right direction while choosing the business structure, help you create a business plan, help you with things like whether you need to register for VAT and handle all other accounting tasks so that you can just focus on your business.

Avoid tax-related dramas

Tax season is daunting, and if you don’t know how to tackle this situation, then there are chances you’ll end up paying more than you owe to the HMRC.

An accountant on hand will keep all the records up to date all year round so that you can be able to pay your tax on time without any errors.

On the other hand, an accountant will ensure that you use all the eligible allowances and reliefs to achieve maximum tax savings.

Also, get some tax tips from our blog when starting your year-end tax planning.

Help improve cash flow

Cash is crucial for running a business.

Without the proper management of cash flow, you are unable to take future business decisions.

A business should generate cash and manage it effectively to meet all the immediate and long-term goals.

An accountant by your side will make sure you have good cash flow policies in place.

Provide valuable advice

When it comes to making important decisions for your business, having a professional by your side to advise can make a huge difference.

An accountant on hand can be a sounding board for your ideas, point out potential risk and point out the opportunities you should take advantage of.

With their knowledge of finance, accountants can help implement complicated strategies and solve problems.

Confused between turnover & profit!! Visit our blog, what is turnover and difference between turnover and profit.

Makes you stress-free

Once your small business begins to run, you’ll need to look after many day-to-day activities rather than being busy with tax, books and other finance-related activities.

An accountant by your side will reduce your working load by taking over financial and tax obligations and help you save both the time and money.

When should I hire an accountant for small business?

Generally, business owners decide to hire an accountant only when their accounts have become unmanageable or find any error.

As you can see, this situation is something like knowing there is a problem in your car, but you only go fix it when it completely breaks down.

The fact here is that you should hire an accountant as soon as you’ve decided to start a small business.

Getting an accountant from the beginning can really help to inform your business’s potential direction.

And if you don’t think you need an accountant for the long run, then you can simply outsource an online accountant for specific tasks like payroll, tax etc.

How much will an accountant help me?

Accountants provide various services from year-end accounts to business advice which depend on the amount of support you require.

Year-end accounts

Some small business may require an accountant to prepare year-end accounts only.

Year-end accounts include bookkeeping, preparation of VAT and PAYE, calculation and filing of tax returns etc.

An accountant prepares your year-end accounts by using the business information you provide.

Regular tax returns

Small business usually submits monthly payroll, quarterly VAT returns,  and yearly corporation tax return. All such returns have timelines, and any delay in submission carries penalties.

An accountant can prepare and submit all such returns on your behalf.

Bookkeeping and management accounts

While some small business may need more regular support from an accountant.

This can include regular bookkeeping services like processing of invoices, bank receipts and payments.

With management accounts service, you’ll view business reports regularly and have an understanding of the business’s performance in real-time.

Do I need an accountant or bookkeeper?

If you think your small business does not have many transactions, and you just need help organising income and expenses, you do not need a bookkeeper. An accountant can prepare your year-end accounts, prepare company tax returns and do an essential tax planning.

However, if you have many transactions, hiring a bookkeeper alongside an accountant is recommended. Most accountants and accounting firms in London have an in-house team of bookkeepers, so you don’t have to deal with multiple individuals or teams.

But a bookkeeper is not an accountant, and to do several accounting tasks, you will need an accountant on hand.

Hire an Accountant For Small Business

Work with UK-based Experts for tax, audit, accounting, payroll, & EIS/ SEIS needs.

Have a question? Call us on
0203 983 8100
Monday to Friday 9am – 4:30pm

Final thought

From helping with the selection of company structure, applying for loans, to doing numbers, an accountant is there to make running your business simple.

You can do your accounts yourself for a while, but engaging an accountant too late can cause many serious errors.

So, it is wise to go with an accountant from your business’s initial stages and watch it grow successfully.