Do I need an accountant for my small business?

Business Planning and Accountants’ Role

The best place to start any business is with a business plan. It not only shows you understand your market and how your business will operate, but it also helps you to develop and focus your business and ideas over time.

An accountant can help you create the perfect business plan, asking you the right questions to ensure that it’s accurate, sensible and viable.

But that’s not all. Dedicated small business accounting firms can also offer a whole host of guidance if you’ve already set up your business, giving you the best possible chance of success.


Setting Up Your Business with Accounting Expertise

There’s a great deal to think about when setting up a small business. What type of structure will you choose – sole trader, partnership, limited company? Where will your funding come from? How do you register with Companies House and HMRC? Do you need to set up a payroll?

An accountant will also help you with your financial planning: assessing your current financial situation, identifying any financial goals and helping you to prepare a roadmap for achieving them.


Tax Management and Compliance

Of course, another key area where small business accounting services come in handy is in preparing and optimising your tax returns. While “tax doesn’t have to be taxing”, as the slogan goes, it can be confusing. The sheer amount of jargon used and the level of detail you have to go into can prove challenging and intimidating, and you may be worried about getting things wrong.

What’s more, there may be tax efficiencies that you could be utilising, saving yourself some money.

Accountants for small businesses can help with all of this. They’ll prepare and optimise your tax returns, ensuring compliance with financial regulations and helping you to save money where you can.


Cash Flow Strategies in Small Business

A small business will rarely enjoy completely consistent cash flow. There are times when you might see a huge increase in your costs or a significant drop in revenue – which could happen for several reasons.

Your business may be more seasonal, bringing in more revenue in the summer or at Christmas and quieter the rest of the year. During the quieter months, though, you’ll still need to pay suppliers and staff…so how will you cope?

Accountants for small businesses are well-versed in cash flow forecasts and savings plans, as well as cost reduction initiatives that will keep your business running smoothly, even during quieter periods.


Growth and Expansion: Accountants as Strategic Partners

You may be in a position to consider expanding your business, whether this is increasing sales and production volumes, launching new products or services, or expanding into new territories. It’s a great position to be in but does take some work to develop your ideas into realistic plans and projections – and a lot of number crunching to make sure it can actually happen. An accountant can help.

It might be that you’re ready to grow but require funding to make that growth happen. Applying for business finance is a rigorous process: your accountant can help you to prepare the documentation that’s needed to prove to lenders that your business is stable, reliable and worth lending to.


The Process of Buying or Selling a Business

It could be that you’re looking to capitalise on your success and sell your business. It may be that you have the opportunity to buy a competitor’s business. Either way, navigating the financial elements of business transactions like these can be a minefield.

Working with an accountant will help to ensure that the right steps are followed in transactions like these. They’ll help you to identify good buyers/vendors. They’ll help you to negotiate a fair price, and fair terms for the sale/purchase. They’ll advise you on due diligence, and help you to understand the tax implications involved in the transaction.


Accounting Needs for the Self-Employed


Close up of a mid adult woman checking her energy bills at home, sitting in her living room


It may be that you’re self-employed rather than operating as a limited company – and while managing your finances can be simpler in these circumstances, it’s still important to get things right.

You may want to consider working with a small business accounting service if you’re new to self-employment to make sure you get things right. You may want to use the services of an accountant for advice on bookkeeping, for help filing your taxes or to understand the best way to manage both your business and your personal finances.

If you’re considering transitioning from sole trader to limited company, an accountant can make this process far simpler, too.


Accounting Software vs. Professional Accounting Services

Huge numbers of businesses now use accounting software – and for good reasons. Such software can save time and effort in a number of areas. It can remove errors, improving your accounting accuracy. It can give you real-time insights into the financial health of your business, it can help you comply with regulations, and most accounting software is scalable, meaning it can grow with you as your company does.

However, accounting software does have its limitations. An off-the-shelf solution may not do everything you need. You’ll want to make sure you have a strong internet connection: if you have outages, you’ll temporarily be unable to access your data. Accounting software stores data in the cloud, which means it is also vulnerable to hacking.

As with anything, you’ll want to weigh up the pros and cons of spending money on accounting software. One thing to remember, though, is that software can’t completely replace an accountant.

We’ve covered this in more detail here. While software has its benefits, it doesn’t have that human touch. It can’t offer professional advice and support, won’t do your bookkeeping for you, and can’t ensure that you are both compliant AND making use of efficiencies where you can.


How to Choose the Right Accountant for Your Business

Choosing an accountant is one thing. Choosing the right accountant is another.

One key thing you’ll want to think about is location. How important is it that the small business accounting services you choose are geographically close by? If this is a key factor, that will narrow down your options. If not, the world is your oyster.

Double-check the qualifications and certifications held by any accountants that you are considering. Do they have the right professional qualifications for your needs?

Of course, qualifications aren’t everything: the right credentials and experience are important too. Look for accountants who have a good knowledge and understanding of your sector. You may also want to consider specialised small business accounting services: smaller firms have very different accounting requirements and regulations than larger businesses.

If you’re a small business operating in the UK, QAccounting can provide you with all the accounting services you need. Contact us to find out more.

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