Should I get an online accountant for my small business?

For a small business owner, an accountant can be very helpful in taking care of financial matters and tax compliance. When you hire an accountant, they will take care of your business no matter how big or small it is. There are so many repetitive and mundane tasks in accounting, but an accountant will ensure that these tasks are handled efficiently.

Apart from this, their suggestions from the finance viewpoint will help you make better financial decisions. An online tax accountant will see that your business is compliant with HMRC rules and regulations. Having an organised finance function will prevent you from running into any unexpected cash flow issues.

At the end of the day, an accountant will take away all of your financial burden from your plate and give you ample time to focus on your business.

This blog post will discuss the benefits of hiring an accountant for small businesses, when you should hire, and how to find the right accountant for your business.

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What does an accountant do?

The accounting process involves recording, analysing, and interpreting financial data. An accountant should report the information from time to time to the business owner. Their analysis and insights are helpful in making better financial decisions.

The typical responsibilities of an accountant are:

  • Preparing financial statements and providing reports for your year-end accounts
  • Filing income tax returns and VAT
  • Business structuring
  • Tax planning
  • EIS/SEIS schemes management
  • R&D tax credits
  • Forecasting the expenses and revenue
  • Analysing the cost of operations
  • Providing insights to make financial decisions

For any business, it would be better to have an accountant working with them right from the start of the business. They can help curate a business plan and aid you in every step of establishing a business.

For many business owners, there is confusion between bookkeeping and accounting. They are two different tasks done by other people. A bookkeeper work is entirely different from what an accountant does. If you are one of those confused business owners, we have a complete guide explaining the difference between bookkeeper and accountant.

There are many accounting software options in the market that accountants and bookkeepers can make the most out of. The software will automate some repetitive tasks and help in saving some time. We have curated a list of the best bookkeeping software for small businesses. Make sure to have a look at it.

Benefits of hiring an accountant for small businesses

So, I hope you have got an idea of the role of an accountant in a small business. Now, let us talk about what benefits these accountants will bring to the table. Hiring an accountant is a considerable investment for small business owners, so let us look at the benefits they can reap with this investment.

Compliance with the HMRC and the Companies House

An Accountant will ensure that your business stays compliant with the applicable laws and regulations. From a small business perspective, this includes:

  • accounts preparation and filing with the Companies House
  • confirmation statement filing with the Companies House
  • Company tax return preparation and filing with the HMRC
  • VAT returns preparation and filing with the HMRC
  • Payroll preparation and filing with the HMRC
  • Share issues and related filings with the Companies House

Creates a solid business plan

If you are looking for investors or loans, it is essential to have a solid business plan. Along with the business plan, you should also have financial projections to help you in the long run.

Your product or service is excellent; there is no doubt in that but remember, this will not be enough. Your investors need to know how your business will perform in the long run. You should give them a reason to invest.

 A good business plan should have financial information that will help investors decide. It focuses on the required areas that investors need- the rate of return, CAPEX, profitability, cashflows, industry insights, business valuation etc.

It should be comprehensive and easy to understand for the investors. An accountant can help you with this. They provide all the reports, your financial plans and projections.

If you are still confused about drafting a business plan, check our guide to writing an effective business plan.

Saves time and money

As a small business owner, you have to take care of different tasks. For an entrepreneur, time and money are the two most valuable assets, without any doubt. This is the reason why you have to be extremely careful about where you invest them.

If you manage all the financials by yourself, you would already know how much time is going into it. Juggling with numbers is not easy without qualifications and prior experience.

HMRC is quite strict about the taxes, and they levy huge penalties for taxes that are wrongly filed. Once your business starts growing, these are not the risks you should take. Investing in an accountant might sound like a financial liability at the start, but this one investment will save you so many pounds in the future.

Make better business decisions

An accountant will help you in every step of your financial decisions apart from filing taxes and making statements for you. They are the ones who have an idea of the complete financial situation of your business.

An accountant will provide you with all the information you need to make the right financial decisions, from providing a financial forecast to presenting you with industry trends.

They provide all the data that is required to make an informed decision. This will help your business in both the short term and long term.

Know everything about income tax in the UK.

Online accountant vs in-house accountant

Now that you know the role of an accountant and the benefits of hiring one, let us discuss whether you need an online accountant or a full-time in house accountant. There is no one size fits all theory here. You are the only one who knows your business and financial situation best, so it would be completely dependent on you regarding whom to hire.

If your small business is on a tight budget and doesn’t need an accountant full time, it is okay to opt for an online accountant. These online accountants have monthly packages, a flat rate or charge per hour, and are affordable for small business owners. However, they will not be available physically and offer their services online only.

However, for businesses where an accountant is needed full time, in-house, there is no other option than hiring one. An in-house accountant will work with you closely and manage the day-in-day-out operations of your business. Full-time accountants may also help you with bookkeeping whenever needed.

In this pandemic era, most businesses prefer to hire an accountant online rather than in-house. This isn’t just cost-saving, but it is a safe option given that COVID-19 is still out there.

On top of that, HMRC has brought in Making Tax Digital. This will reduce paperwork and combat different mistakes in tax calculations. MTD requires business owners to have all accounting-related work saved in compliant software. This makes it easy to work with online accountants, no matter wherever they are from.

Know how accounting can help small businesses succeed

Hiring a tax accountant online will give you various options to choose from. If you are looking for a specific skill or expertise, you can look for those with that skill set. You will be paying them for that alone, and it is cost-effective.

So, there are pros and cons for both online and in-house accountants. Choosing one from either is not easy, but as said earlier, you know about your business well, and it should be your choice to go with the accountant that you are comfortable with.

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

How to find an accountant?

If you are looking for an in-house accountant, a simple post on job sites will be enough to get that accountant for you. However, if you are looking for an online accountant, you have to be thorough with your search. There are ways to find an accountant:

  • Phone a friend
  • Google search

You can shop around and find the right match for your business. The process can be time-consuming, or you can trust Experlu to match you with the right accountant.

Once you find the accountant, make sure to ask them all the right questions. Conduct a thorough background check if you think someone will be good for business. This is important. An accountant will be dealing with some of the most confidential information of your business, and you wouldn’t want it to get exploited right!

You can check the reviews of candidates online and also ask them about the references without any hesitation. Get on-call with those references and know how to work with them.

Check our guide on : How to Choose an Accountant for Your Small Business?

Wrapping up

Being a small business owner, it is common to hesitate to invest in an accountant. But, an accountant will help your business in the long run. If you cannot afford an in-house accountant, go for an online accountant. Look for them in the right places, and you can find one who can manage your accounts without burning a hole in your bank account.

Experlu Editorial Team
The editorial team at Experlu is comprised of seasoned financial professionals dedicated to providing high-quality content on accounting and finance. With a wealth of experience and diverse expertise, the team produces insightful articles that have established the Experlu blog as the UK's leading financial and accounting resource. The team includes accountants, auditors, and business advisors who stay updated with the latest industry developments. Their commitment to excellence ensures that Experlu remains a trusted source of information, helping readers stay informed about audit, business, finance, and tax matters.