Hey there, fellow small business owner! Thinking about getting an accountant for your venture? Well, you’re not alone in pondering this question. It’s a big decision, and I’m here to chat you through it in a way that hopefully makes sense and maybe even brings a smile to your face. So, grab a cuppa, and let’s dive into the world of small business accounting!

Is it Worth Getting an Accountant for a Small Business?

The short answer? In most cases, absolutely! But I know you’re after more than just a quick yes or no, so let’s break it down and look at why having an accountant in your corner can be a game-changer for your small business.

Time: Your Most Precious Resource

Let’s face it, as a small business owner, you’re probably wearing more hats than a milliner’s shop window. You’re the CEO, the marketing department, the customer service team, and sometimes even the tea maker! With all that going on, do you really have time to be poring over spreadsheets and tax codes?

This is where an accountant can be your knight in shining armour (or at least in a smart suit). They can take all those number-crunching tasks off your plate, freeing you up to focus on what you do best – running and growing your business. Imagine what you could achieve with all those extra hours in your week!

But it’s not just about saving time; it’s about reducing stress too. No more late nights worrying about whether you’ve filled in that tax form correctly or if you’ve missed a crucial deadline. Your accountant’s got your back, giving you peace of mind and maybe even a few more hours of sleep!

Show Me the Money: Financial Benefits

Now, I know what you might be thinking. “But wait, won’t hiring an accountant cost me money?” Well, yes, it will. But here’s the kicker – a good accountant can actually save you money in the long run. How? Let me count the ways:

1. Tax Efficiency: Taxes can be a real headache, can’t they? But accountants know the tax system like the back of their hand. They can help you navigate the complex world of tax legislation, ensuring you’re not paying a penny more than you need to. They’ll spot deductions you might have missed and help you plan your finances in a way that minimises your tax liability. It’s like having a financial superhero on your side!
2. Cost Savings: Accountants have a keen eye for unnecessary expenses. They can review your financial records and spot areas where you might be overspending. Maybe you’re paying for a subscription service you no longer use, or perhaps there’s a more cost-effective supplier for your raw materials. These savings can add up to a tidy sum over time.
3. Improved Cash Flow: Cash flow is the lifeblood of any business and managing it well can be the difference between success and failure. An accountant can help you keep on top of your cash flow, ensuring you have enough money coming in to cover your outgoings. They can help you set up systems to chase late payments, manage your inventory more effectively, and plan for future expenses. It’s like having a financial crystal ball!

Expert Advice and Compliance: Staying on the Right Side of the Law

The world of business finance is constantly changing, with new regulations and policies popping up all the time. Trying to keep up with it all can feel like trying to nail jelly to a wall! But guess what? That’s exactly what accountants do for a living.

1. Staying Updated: Your accountant will keep abreast of all the latest changes from HMRC and other regulatory bodies. They’ll make sure you’re always compliant with the latest rules and regulations, saving you from potential fines or legal issues down the line.
2. Financial Advice: Beyond just crunching numbers, accountants can offer valuable insights into your business’s financial health. They can help you understand your financial statements, spot trends, and make informed decisions about your business’s future. It’s like having a financial guru on speed dial!
3. Regulatory Compliance: From VAT returns to annual accounts, there’s a lot of paperwork involved in running a business. Your accountant can ensure all your financial records are in order and that you’re meeting all your legal obligations. No more sleepless nights worrying about whether you’ve dotted all the i’s and crossed all the t’s!

Reducing Risk: Your Financial Safety Net

Running a business always involves some level of risk, but having an accountant can help minimise those risks when it comes to your finances.

1. Audit Management: If the dreaded word ‘audit’ ever comes up, your accountant will be worth their weight in gold. They can handle both statutory audits and internal audits, ensuring everything is in order and above board.
2. Error Prevention: We’re all human, and mistakes can happen. But when it comes to your business finances, even small errors can have big consequences. Having a professional accountant oversee your finances significantly reduces the risk of costly mistakes.
3. HMRC Investigations: Did you know that having an accountant can actually lower your risk of being investigated by HMRC? It’s true! HMRC tends to view businesses with professional accountants as lower risk. And if you do face an investigation, your accountant will be there to guide you through the process.

Supporting Business Growth: Your Financial Co-pilot

An accountant isn’t just there to keep you out of trouble; they can also play a crucial role in helping your business grow and thrive.

1. Strategic Planning: Your accountant can analyse your financial data to help inform your business decisions. They can help you understand which parts of your business are most profitable, where you might need to cut costs, and where there might be opportunities for growth. It’s like having a financial roadmap for your business journey!
2. Loan Assistance: If you’re looking to expand your business and need a loan, your accountant can be a huge help. They can prepare all the financial documentation you’ll need for your loan application, increasing your chances of approval. They might even be able to advise on the best type of financing for your specific situation.
3. Financial Statement Preparation: Regular, accurate financial statements are crucial for making informed business decisions. Your accountant can prepare these for you, giving you a clear picture of your business’s financial health at any given time. It’s like having a regular health check-up for your business!

Peace of Mind: The Priceless Benefit

At the end of the day, perhaps the biggest benefit of having an accountant is the peace of mind it brings. Knowing that a professional is handling your finances, keeping you compliant, and helping you make smart financial decisions can be incredibly reassuring. It allows you to focus on what you do best – running and growing your business – without constantly worrying about the financial side of things.

As Julie Corkish, ICAEW’s Head of Practice, puts it: “If you run a small business, hiring an accountant is one of the best investments you can make”. And I couldn’t agree more!

But How Much Will It Cost?

Now, I know what you’re thinking. All this sounds great, but how much is it going to set me back? Well, the cost of hiring an accountant can vary quite a bit depending on your business’s size, structure, and needs. But don’t worry, I’ve got some ballpark figures for you:

For Sole Traders/Self-Employed:
If you’re flying solo, you might be looking at anywhere from £250 to £1,000+ VAT per year. This typically covers your annual accounts and tax return.

For Limited Companies:
If you’ve set up a limited company, you’re probably looking at around £60 to £250+ VAT per month. This usually covers your annual accounts, corporation tax return, and personal tax return.

More specific estimates include:

• £300-£400 per year for a basic limited company with low turnover
• £500-£1,000+ VAT per month for established small businesses
• £75-£150 per month for sole traders

For Individual Services:

• Self-assessment tax return: £150-£300
• VAT returns: £120-£240+ VAT per quarter, depending on turnover
• Bookkeeping: £20-£50 per hour

Remember, these are just rough estimates. The actual cost can depend on a variety of factors, including:

• Your business structure (sole trader vs limited company)
• Your turnover
• The number of employees you have
• How complex your finances are
• What specific services you need (e.g., bookkeeping, payroll, tax returns, etc.)

Some accountants offer fixed fee packages, while others charge hourly rates (typically £35-£60 per hour for basic services). It’s always a good idea to shop around and compare services. But remember, the cheapest option isn’t always the best value. Look for an accountant who understands your business and can offer the services you need.

Top Tips for Choosing an Accountant

If you’ve decided that hiring an accountant is the right move for your business (and I hope I’ve convinced you that it probably is!), here are a few tips to help you choose the right one:

1. Look for Qualifications: Make sure your accountant is properly qualified. Look for certifications from recognised bodies like ICAEW, ACCA, or CIMA.
2. Consider Specialisation: Some accountants specialise in certain industries or types of businesses. Finding one with experience in your sector can be a big plus.
3. Check Their Tech: In this digital age, it’s important that your accountant is up to speed with the latest accounting software. This can make collaboration much easier.
4. Communication is Key: You want an accountant who can explain complex financial concepts in a way you can understand. Don’t be afraid to ask questions during your initial consultation.
5. Consider Location: While much can be done remotely these days, you might prefer an accountant who’s local to you for face-to-face meetings.
6. Ask About Fees: Make sure you understand exactly what services are included in the quoted price. Are there any additional charges you should be aware of?
7. Trust Your Gut: Your accountant will be privy to sensitive financial information about your business. It’s important that you feel you can trust them.

Making Your Accountant’s Job Easier (and Potentially Cheaper!)Once you’ve hired an accountant, there are a few things you can do to make their job easier (and potentially reduce your costs):

1. Keep Good Records: The more organised your financial records are, the less time your accountant will need to spend sorting through them.
2. Use Accounting Software: Many accountants have preferred software that they work with. Using this software yourself can make it much easier to share information.
3. Communicate Regularly: Don’t wait until tax season to speak to your accountant. Regular check-ins can help prevent issues before they become problems.
4. Be Proactive: If you’re planning any major changes in your business, let your accountant know. They might be able to offer valuable advice.
5. Ask Questions: If there’s something you don’t understand, ask. The more you understand about your finances, the better decisions you can make for your business.

The Bottom Line

At the end of the day, hiring an accountant is an investment in your business. Yes, it’s an additional expense, but the potential returns – in terms of time saved, stress reduced, taxes optimised, and financial insights gained – can be enormous.

An accountant can be more than just someone who does your taxes once a year. They can be a valuable partner in your business, offering advice, spotting opportunities, and helping you navigate the complex world of business finance.

So, if you’re still on the fence about whether to hire an accountant, I’d encourage you to at least have a chat with one. Many offer free initial consultations where you can discuss your needs and see if they’re a good fit for your business.

Remember, your business is unique, and what works for one might not work for another. But for many small businesses, having a good accountant on board can be the secret ingredient to financial success and peace of mind.

Here’s to your business success, and to never having to worry about a tax return again! Cheers!