Do I Need an Accountant for My Business? Explained

Do I Need an Accountant for My Business? Explained

If you’re running a company, being cost-conscious is a must. However, one area which you should never attempt to cheap out on is accounting.

Hiring a professional accountant for your business can be beneficial in many ways. One of the key benefits is the accuracy and efficiency they bring to the table. Professional accountants provide highly accurate reporting and can help you keep track of and document information accurately, efficiently, and simply.

This can ensure more accurate forecasting in the long term and avoid any damage to the organisation’s reputation.

Do I Need an Accountant for My Small Business?

The decision to hire an accountant for your small business depends on various factors such as the complexity of your financial transactions, your comfort level with numbers, and the stage of your business.

In the early stages, you might be able to handle the financial aspects of your business. However, as your business grows, managing finances can become more complex. An accountant can help you navigate tax laws, improve financial efficiency, and provide valuable financial advice.

Moreover, an accountant can free up your time, allowing you to focus on what you do best – running your business. So, while it’s not mandatory, having an accountant for your small business can be a valuable asset. Remember, the cost of hiring an accountant could be significantly less than the cost of an error in your financial management.

How Can an Accountant Help My Small Business?

Here are 3 key reasons why hiring a professional is a better option for your business than DIY-style accounting.

1. Reduced Workload

In most cases, it’s not particularly feasible to keep on top of your business finances. As a business owner, you’ll rarely have enough time in the day to handle all the stuff that needs doing: managing, budgeting, researching, product-developing, hiring and so on. And that’s before you even consider accounting.

You might be under the impression that spinning one more plate wouldn’t be a massive problem. But, accounting is not an area you can afford to get wrong. 

Taking the time out to learn how it works – and all with no guarantee of getting it right – is a sure-fire way to stress yourself out. The last thing you want is to be fussing over your books.

Outsourcing your tax work to someone else is a great way to save a little time and allow you to focus more on the parts of the business that need your attention.

2. Fewer Financial Penalties

Making a few errors on your tax return is probably not going to be too detrimental. However, if miscalculations feature more consistently, you could have a problem on your hands. Errors that occur repeatedly across your return are likely to be perceived as “careless”, thereby triggering a financial penalty.

Unfortunately, steering clear of those penalties is about more than just taking ample time and knowing how to use a calculator. There’s more to accounting than just plugging in numbers. For instance, your tax return will contain some technical terms you might not be familiar with. These terms will, however, make perfect sense to a trained accountant.

3. Quality Business Advice

The impact of a great accountant extends beyond the tax return. They’ll also be able to advise on your business operation as a whole. For example, they might be able to analyse your financial statements and pinpoint areas where efficiency savings could be made.

Do I Need an Accountant as a Sole-trader?

As a sole trader, your business affairs are often considerably simpler than those of a larger company. However, this doesn’t mean that an accountant won’t be beneficial.

An accountant can help you with a range of tasks, from setting up your accounts and helping you register for self-assessment, to advising on tax deductions and helping you plan for the future. They can also ensure you’re meeting all your legal obligations when it comes to filing tax returns and paying tax on time.

While it’s possible to handle these tasks yourself, the time and effort required can often be better spent on growing your business. Plus, the peace of mind that comes from knowing your finances are in order can be invaluable. So, while it’s not a necessity, many sole traders find the services of an accountant to be a worthwhile investment.

Work With Q Accountants

We hope you found this guide useful, helping you to decide whether you need to work with an accountant moving forward. At Q Accountants, we can keep on top of your financial requirements, allowing you to free up time for more pressing business matters. Our expert team can help with other tasks too, such as cash flow management and the creation of expansion plans.

Contact us today to find out how we can help your business, or alternatively book in a discovery call.

Frequently Asked Questions

  1. Is it worth using an accountant?

    Yes, it is worth using an accountant. An accountant can provide valuable financial expertise and guidance to help manage and optimise your business finances.

  2. What happens if you don’t have an accountant?

    There is no legal requirement to have an accountant. However, not having an accountant could mean you make mistakes which could cost you time and money.

  3. Does every small business need an accountant?

    While there is no legal requirement for a small business to have an accountant, it can bring many advantages. An accountant can handle key functions such as bookkeeping, filing your company and HMRC returns on time, and provide invaluable general business advice.

  4. Does a sole trader need an accountant?

    There is no legal requirement for a sole trader to hire an accountant. However, if you want to ensure that all your tax affairs are absolutely correct, then hiring an accountant is a good idea.

  5. What do small businesses need to account for?

    Small business accounting involves tracking money flow in various forms, including operating expenses, cost of goods sold, accounts receivable and sales. It also takes into account liabilities, such as accounts payable, business loans and taxes, and the value of your assets, such as cash and inventory.