Why do startups need an online accountant?

Most startups in the UK suffer due to insufficient cash flow and ineffective accounting practices in business. Regardless of whether the startup is funded, you must pay close attention to finances and cash flow from day one.

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An online accountant offers experienced services to startups at a lower cost than in-house accountants. Read this comprehensive guide to know more.

Table of contents

●  How can an online accountant add value to my business?
●  What can I expect from an online accountant?
●  When to hire an online accountant?
●  How to find the best online accountant for startups?
●  Conclusion

How can an online accountant add value to my business?

Startups may not necessarily need to hire a full-time accountant, as they have little financial doings in the initial years. However, as a business expands and finances get complicated, they are the life savers.

Here are a few ways how an online accountant adds value to startups.

●  Take risky and calculated decisions
Startups need to consider things that involve analysing a market. It includes examining cash flows, financial forecasting, and balancing financial statements are a few of the complex accounting tasks that business needs to focus on regularly.

An accountant can help you generate accurate reports, look for risks, and make sound, calculative decisions. Additionally, using that expertise in financial matters, startups can calculate the actual progress, which helps them stay in line with future goals.

Plus, they can sort out any discrepancies in the business leading to significant hurdles in its path to success.

●  Stay more focused on the business scenario
If we start up dreams of making higher profits and expanding business. But lack of proper planning and financial support negatively impacts every business decision.

However, with a professional on your back, you can stay more focused on business scenarios and make reliable decisions for Investments and growth.

They have experience working with numerous startups in your industry and can help you implement different financial models to devise a plan for resource management and prepare financial strategies for the future.

●  Secure funding
Startups find it difficult to secure funding as investors and financial institutes may not see it as the best place for investment. However, an accountant can use their expertise and connections to get funds.

They help you prepare accurate financial reports and forecast financial projections for the next few years. These reports assure the investors where they are putting the money and how much return they can expect.

●  Save the most valuable resources, your time and money
Hiring online accountants saves you money on employee benefits like paid sick leaves, pensions, etc. Plus, they understand your eligibility for tax deductions. So, with experts, you don’t spend unnecessary taxes and instead use the money in core activities.

Time is a valuable factor for startups. Accountants handle day-to-day accounting operations in business, prepare taxes, remember deadlines, record and update financial data, create accurate statements, etc. They free up your time to focus on productive activities.

●  No more tech difficulties
All startups are not tech companies, and many founders are digital natives. As marketing, sales, advertising, recruitment, and almost every other task in a company have migrated mainly to the digital world, understanding the use of technology is essential.

Accountants help you take the first step by utilising the latest technology and educating owners on how to use them for business.

●  Deduce a clear picture of business performance
You may miss certain risks when looking into the financial statements, but your accountant won’t. They give a clear view of cash flow, profit and loss, and a balance sheet, showing where your business stands financially, where things went wrong, and how a slight improvement can change the scenario.

●  Stay away from legal contradictions
Accountants stay updated with the latest government regulations. They investigate all financial activities inside a business and ensure you comply with the rules. This saves you from legal actions and penalties or closing down at worst.

What can I expect from an online accountant?

Most startups usually start their business with the owner handling every business operation. The complicated payroll is unnecessary if you don’t have employees, but the business must stay on top of accounting.

An online accountant can help you with the following:

●  Preparing statutory accounts
●  Recording and updating financial transactions
●  Creating financial statements
●  Preparing self-assessment tax returns and paying taxes within deadlines
●  Assist in making sound financial decisions
●  Track and analyse cash flow in business
●  Set budgets
●  Helps in gathering funds
●  Observe business performance and track for opportunities and possible risks
●  Maintain compliance with government regulations

If you are employing staff in the business, accountants can help you with payroll. Furthermore, if your business is making an annual turnover above the VAT Threshold and you registered with HMRC for VAT, these professionals can help deal with that.

When to hire an online accountant?

There is no fixed time to hire an online accountant, as it depends on your business needs and priorities.

For startups on tight budgets, it makes more sense to hire online accountants as they usually charge by the hour or a flat rate per project. You don’t need them throughout the year, and it is, therefore, a convenient choice.

When accounting gets complicated and you see certain red flags, it’s time to hire a professional. A few red flags may be:

●  Consistently delaying tax payments
●  Inaccuracy in financial statements
●  Unhealthy financial situation
●  Improper cash flow
●  Accounting is time-consuming

How to find the best online accountant for startups?

Like any hiring process, the best online accountant hiring requires effort and time commitment on your part. Let’s follow the steps to make the process look easy.

●  Use your connections and ask for referrals.
●  Search them on authentic platforms, or look through their websites
●  Shortlist candidates that fit your industry
●  Ask questions regarding their qualification, experience, specialisation, services, costs, etc.
●  Compare the top candidates
●  Look into clients’ reviews and feedback


Hiring an online accountant ensures you get the right expertise in your business at lower costs. Startups usually take a step back in hiring professionals to save money.

But they are the backbone of companies and can help you in numerous ways to grow and expand your business. It always advisable to discuss with business professionals during the initial stage of startups and secure your future.

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.