Do I need an accountant as a sole trader?

The Role of Accountants in Sole Trader Businesses

There are three key ways in which accountants can assist sole traders.

The first is by assisting with your tax obligations and reporting, including both income tax and National Insurance.

The second is helping with your financial management and planning, tracking your income and expenditure and planning for the future.

The third way is to give you support with your business growth and scaling strategies, improving your revenue and helping your business to flourish.

At QAccounting, we can help with all three. Our specialised accountants for sole traders offer a tailored, personal service that will give you complete peace of mind when it comes to your business finances. Whether you’re simply looking for sole trader accounting services to help with your annual tax return or you want an expert to completely oversee your finances, we’re here to help.

Tax Obligations and Reporting for Sole Traders

As a sole trader, you’ll need to complete a tax return every year. This will determine how much tax and National Insurance you’ll pay. It is also your responsibility to make these payments when due.

There is plenty of guidance that will help you to complete your tax returns yourself, but it’s a process that may not be particularly straightforward for everyone. What’s more, working with a professional accountant may help you to uncover areas where you could be saving yourself money.

For your tax return to be accurate, your day-to-day bookkeeping must be accurate, too. You’ll need to make sure that all outgoing and incoming payments – plus the dates of these payments – are carefully recorded. You’ll need to make sure you retain all of the relevant paperwork. This could be done via a simple spreadsheet, or via specialised accounting software, depending on your needs. By working with a professional sole trader accounting firm, you can be sure that everything is being done by the book.

Financial Management and Planning for Sole Traders

How aware are you of your day-to-day finances? Do you know your regular outgoing payments? Do you have enough money coming in to cover these at all times of the year, or are there seasonal variations in your income?

Have you checked to see whether any of your outgoings can be reduced? Are you setting aside money to cover your tax bill? Are you tracking your monthly profits and losses, and, importantly, do you have plans in place to grow?

All of this can be challenging if accounting isn’t your strong point. As a sole trader, when your weekly or monthly income isn’t fixed, it can be even trickier. This is one of the many benefits of working with a sole trader accounting firm, who can give you the tools you need to constantly analyse your finances, keeping your budget and cash flow predictions under control.

Growth Strategies and Scaling for Sole Traders

Most sole traders will have growth on their minds. But how can you make sure this growth actually happens?

Will you focus on better-paid contracts, or will you look to take on more clients? Will you introduce additional revenue streams, or will you raise your prices?

As a result of your growth, will your business plan need altering? Will you need to take on staff – and if so, are you confident that you can change your business structure without external support?

There’s a great deal involved in expanding your business as a sole trader – especially if you need to switch to become a partnership or a limited company. It might be that you’re no longer wondering, “Do I need an accountant as a sole trader?”, but instead thinking, “Do I need an accountant to help me navigate my Companies House and HMRC obligations as I grow?” With over 20 years of experience in helping sole traders to grow, QAccounting is here to help.

Selecting the Right Accountant for Sole Traders

Choosing an accountant is one thing. Choosing the right accountant is another. How can you be sure that you’re getting the right level of experience, the right qualifications and the best value for money?

Of course, you’ll want to be sure that any accountant you work with is fully qualified – and that they also hold the relevant professional certifications that show that they are a trusted resource.

However, qualifications and certifications may not be enough: are they experienced accountants for sole traders? As a sole trader, rather than a limited company or a larger organisation, your accounting needs will be very different. Check whether the firm specialises in sole trader accounting so you can be sure you’re getting support and advice that’s tailored to the size and requirements of your business.

Word of mouth and positive reviews are also important: you want to be certain that you’re working with someone who other sole traders trust. At QAccounting, we’re incredibly proud of the feedback we receive from the sole traders we work with – and with a dedicated Client Manager and accountant for all of our clients, you can be certain that you’re getting personal, tailored support and advice from a team that understands your needs inside out.

Balancing DIY Accounting and Professional Help

There’s no denying that managing your own sole trader accounting will reduce your external spend. However, this reduced spend doesn’t necessarily mean you’ll be saving money.

At QAccounting, our accountants for sole traders can help you to save money in various ways. They can help you to manage your budgets and cut down your outgoings. They can help you to grow your business to increase your revenue. They can also help you to uncover any tax efficiencies you may have missed, reducing your annual tax burden.

It can be tempting to opt for accounting software instead of hiring a professional accountant – and there are certainly benefits to doing so. Software can reduce the risk of manual errors, cut down your admin time and give you plenty of insights that can help you to streamline and grow your business.

However, software can’t do everything. If you want peace of mind that you’re doing things by the book, or you’re looking for professional advice based on your own unique circumstances, there’s no replacement for a dedicated sole trader accountant.

Addressing Common Financial Challenges for Sole Traders

As a sole trader, what are your biggest financial challenges?

Among our clients, there are certain financial issues that crop up time and time again. One of the biggest hurdles our clients face is unpredictability: a lack of consistency in revenue which can make budgeting, paying outgoings and saving for tax bills a struggle. This can sometimes be caused by seasonal fluctuations, or may simply be down to how much time you have to market yourself to bring in more income.

One other major challenge is navigating the world of sole trader taxation: the fear that you aren’t doing things 100% right.

Whatever your biggest financial challenges, we’re here to help. Whether you’re looking for accurate bookkeeping solutions, help with your tax return, budgeting advice, financial planning or help to change your company structure, we can tailor our services to meet your exact needs.

You’ll find all the information you need about our sole trader accounting services here – along with information about our pricing. Read the reviews from existing QAccounting clients, and you’ll see that it’s a small price to pay for dedicated sole trader accounting services that will truly help your small business to flourish.