{"id":145692,"date":"2024-04-02T13:30:35","date_gmt":"2024-04-02T12:30:35","guid":{"rendered":"http:\/\/chrisw92.sg-host.com\/?p=145692"},"modified":"2024-07-12T10:20:14","modified_gmt":"2024-07-12T09:20:14","slug":"need-accountant-small-business","status":"publish","type":"post","link":"https:\/\/realbusiness.co.uk\/need-accountant-small-business","title":{"rendered":"Do I need an accountant for my small business?"},"content":{"rendered":"<div class='booster-block booster-read-block'><\/div><p><b>Taking the step to own your very own small business is huge, making you responsible for a lot of your own time and money. Many take the understandable stance to recruit as few staff as possible, and an accountant may especially seem like a non-valuable expense considering the budget. However, the US Small Business Administration&#8217;s 2018 study, &#8220;The State of Small Business&#8221; found that 82% of business closures within the first 18 months are due to cash flow problems, which doesn&#8217;t necessarily mean a lack of funds, but rather their poor use.<\/b><\/p>\n<p><span style=\"font-weight: 400;\">So, is hiring accounting services worthwhile for a small business? Today, we will discover the ins and outs of accounting services, including who needs them, when&#8217;s the best time to hire one, and their overall effects on a growing business.<\/span><\/p>\n<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_74 counter-hierarchy ez-toc-counter ez-toc-grey ez-toc-container-direction\">\n<p class=\"ez-toc-title\" style=\"cursor:inherit\">Table of Contents<\/p>\n<label for=\"ez-toc-cssicon-toggle-item-684fe23ff405f\" class=\"ez-toc-cssicon-toggle-label\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #999;color:#999\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #999;color:#999\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/label><input type=\"checkbox\"  id=\"ez-toc-cssicon-toggle-item-684fe23ff405f\"  aria-label=\"Toggle\" \/><nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/realbusiness.co.uk\/need-accountant-small-business\/#What_is_an_accountant\" >What is an accountant?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/realbusiness.co.uk\/need-accountant-small-business\/#Is_a_small_business_accountant_required_for_small_business_growth\" >Is a small business accountant required for small business growth?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/realbusiness.co.uk\/need-accountant-small-business\/#What_do_accountants_do_for_small_businesses\" >What do accountants do for small businesses?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/realbusiness.co.uk\/need-accountant-small-business\/#When_is_it_ok_to_do_your_small_business_accounting\" >When is it ok to do your small business accounting?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/realbusiness.co.uk\/need-accountant-small-business\/#Conclusion\" >Conclusion<\/a><\/li><\/ul><\/nav><\/div>\n\n<h2><span class=\"ez-toc-section\" id=\"What_is_an_accountant\"><\/span><b>What is an accountant?<\/b><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p><span style=\"font-weight: 400;\">Typically, as a business grows, the logistics will be too much for the business owner alone to handle. This usually leads to outsourcing an accountant or hiring one in-house. The following are some examples of what an accountant will do for a business:<\/span><\/p>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Financial reporting and recording &#8211; <\/b><span style=\"font-weight: 400;\">Ensuring you have accurate financial information is important for tax purposes, as well as making plans.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Budgets and Plans &#8211; <\/b><span style=\"font-weight: 400;\">An accountant will look at the overview of finances and set budgets, ensuring that there&#8217;s no overspending involved and that the money allocated will last to achieve the maximum value.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Financial Analysis &#8211; <\/b><span style=\"font-weight: 400;\">Accountants analyse financial stats, finding weak points to work on.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">And more<\/span><\/li>\n<\/ul>\n<p>&nbsp;<\/p>\n<p><span style=\"font-weight: 400;\">The main reason that most small businesses don&#8217;t want to use an accountant isn&#8217;t because they don&#8217;t see the value, but more that they don&#8217;t understand it.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">A business owner first has to contend with their finances, and where their start-up capital will come from. Your goods and services will need a price point, and they will need efficient supply. Without having a plan for a business&#8217; finances that goes beyond a couple of months, your small business is almost certain to fail, but having a long-term plan means having a roadmap for sustainable growth whilst accounting for any potential challenges faced.<\/span><\/p>\n<h2><img fetchpriority=\"high\" decoding=\"async\" class=\"size-full wp-image-191934 aligncenter lazyload\" style=\"font-size: 16px;\" src=\"data:image\/gif;base64,R0lGODlhAQABAIAAAAAAAP\/\/\/yH5BAEAAAAALAAAAAABAAEAAAIBRAA7\" data-src=\"https:\/\/realbusiness.co.uk\/wp-content\/uploads\/2021\/02\/shutterstock_1859510656-min-scaled.jpg\" alt=\"Small Business Plan \" width=\"1200\" height=\"801\" \/><noscript><img decoding=\"async\" class=\"size-full wp-image-191934 aligncenter lazyload\" style=\"font-size: 16px;\" src=\"https:\/\/realbusiness.co.uk\/wp-content\/uploads\/2021\/02\/shutterstock_1859510656-min-scaled.jpg\" alt=\"Small Business Plan \" width=\"1200\" height=\"801\" srcset=\"https:\/\/realbusiness.co.uk\/wp-content\/uploads\/2021\/02\/shutterstock_1859510656-min-scaled.jpg 1200w, https:\/\/realbusiness.co.uk\/wp-content\/uploads\/2021\/02\/shutterstock_1859510656-min-300x200.jpg 300w, https:\/\/realbusiness.co.uk\/wp-content\/uploads\/2021\/02\/shutterstock_1859510656-min-1024x684.jpg 1024w, https:\/\/realbusiness.co.uk\/wp-content\/uploads\/2021\/02\/shutterstock_1859510656-min-1536x1025.jpg 1536w, https:\/\/realbusiness.co.uk\/wp-content\/uploads\/2021\/02\/shutterstock_1859510656-min-2048x1367.jpg 2048w\" sizes=\"(max-width: 1200px) 100vw, 1200px\" \/><\/noscript><\/h2>\n<h2><span class=\"ez-toc-section\" id=\"Is_a_small_business_accountant_required_for_small_business_growth\"><\/span><b>Is a small business accountant required <\/b><b>for small business growth<\/b><b>?<\/b><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p><span style=\"font-weight: 400;\">A Small business owner can choose to do their accounting services themselves, but as we claimed before when a business grows, the business finances will become a more complex logistical factor. That being said, it&#8217;s important to understand that you will be required to <a href=\"https:\/\/realbusiness.co.uk\/how-to-do-a-tax-return-for-a-small-business\">complete tax returns<\/a> and keep a record of all incoming and outgoing money.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Ask yourself a few questions to decide if you need an accountant for your small business:<\/span><\/p>\n<ol>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Do I know how to use accounting software?<\/b><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>How complex are the logistics behind my business finances?<\/b><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Do I have the time and capacity to ensure accounting services are done correctly?<\/b><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Do you understand how to file tax returns?<\/b><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Have I set long-term, sustainable goals for my business?<\/b><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Do I know how to commence with financial reporting, tax compliance, payroll services, tax efficiency and business planning?<\/b><\/li>\n<\/ol>\n<p><span style=\"font-weight: 400;\">You don&#8217;t need to have a positive answer to each of these questions, as they are all based on knowledge. Suppose you are not confident you can fulfil the role of an accountant. In that case, you should consider immersing yourself in the study.n<\/span><span style=\"font-weight: 400;\">Businesses can succeed just fine without hiring accounting services through a new hire or an accounting firm. However, it&#8217;s worthwhile noting the stat we quoted leading into this article &#8211; businesses that do not concern themselves with the future of their finances are doomed to fail.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">It&#8217;s worthwhile looking at accountancy services for small businesses not as an investment, but for what it is &#8211; a huge advantage that most small businesses do not employ. The health of business finances depends on a business plan, as well as reliance on a sustainable room to grow, free of bottlenecks arising from unexpected sources, which may form from weaknesses in your balance sheet that you&#8217;re not even aware of.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">It&#8217;s worthwhile to note one thing that often sweetens attitudes towards acquiring an accountant &#8211; sooner or later, your business will grow too big for a business owner to be concerning themselves with constantly recording and adjusting their accounts. It&#8217;s a matter of time, regardless of whether you&#8217;re inclined to hire one or not.<\/span><\/p>\n<h2><span class=\"ez-toc-section\" id=\"What_do_accountants_do_for_small_businesses\"><\/span><b>What do accountants do for small businesses?<\/b><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p><span style=\"font-weight: 400;\">When small business owners underestimate or simply don\u2019t understand, the role of an accountant &#8211; they lose out on a huge business advantage. Accountants do far more than prepare your accounts for income tax returns and chase you to keep your documents in order. They provide a range of specialized accounting services tailored to small businesses, such as bookkeeping, tax returns, VAT returns, payroll services, and more.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Accountants prepare income tax returns, compile documents for easy sorting, and much more, including bookkeeping, VAT returns, payroll services etc. Accountants train for years, many of them going through university, to know their craft inside and out. Simply put, even if you know your business, it&#8217;s unlikely that you know accountancy.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Small business accounting services vary depending on industry, but the following are some of the main things a small business accounting package is likely to consist of:<\/span><\/p>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Business Plan &#8211; <\/b><span style=\"font-weight: 400;\">An imperative tool. A business plan streamlines your day-to-day business choices, and it also improves the chances of acceptance if you&#8217;re planning to apply for a loan, rent, or anything else.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Business structure &#8211; <\/b><span style=\"font-weight: 400;\">Small business accountants will outline the options a business has in terms of structure. Most businesses begin as sole traders, but there are many advantages to be had, especially as the business grows, switching to another structure &#8211; such as the lowered amount of tax that a limited company demands at higher income brackets.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Financial software &#8211; <\/b><span style=\"font-weight: 400;\">There are many examples of financial software used by accountants out on the internet, but knowing the basic commands simply won&#8217;t cut it. There&#8217;s a lot of automation, checks, and higher level quality of life features spread across applications, and someone whose mind is on accounting will know the ins and outs to help them deliver the best possible production.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Work smarter, not harder &#8211; <\/b><span style=\"font-weight: 400;\">Growth is great, but only growth you can sustain. Overextension is how the Roman Empire, masters of iron-age logistics, fell, and the same happens to small businesses all the time. You need to know ahead of time how you&#8217;ll be growing, and have the infrastructure in place to support that growth.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Trends &#8211; <\/b><span style=\"font-weight: 400;\">If there&#8217;s one thing you&#8217;ll likely never delve into as a business owner running your accounting, it&#8217;s accounting trends and constantly updating regulations. Running afoul of HMRC or other governmental entities can be a scary experience, and they rarely give out passes.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Income tax returns<\/b><span style=\"font-weight: 400;\"> &#8211; An employee may never have to know the stressful period that is the end of the tax year. Proper preparation ahead of time, as well as having tested expertise, is the easiest way to ensure filing your tax returns is as stress-free and simple as possible. With an accountant, you&#8217;re effectively paying someone else to do this duty that nobody wants.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Cash flow advice and management<\/b><span style=\"font-weight: 400;\"> &#8211; Controlling credit and ensuring a healthy cash flow effectively means you&#8217;re dodging avoidable, yet highly intrusive problems, like bottlenecks. Having to work harder to free the bottleneck, knowing that you&#8217;re missing opportunities, is frustrating, and the longer they exist, the more you&#8217;re effectively taking back your progress.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Reducing workload<\/b><span style=\"font-weight: 400;\"> &#8211;<\/span> <span style=\"font-weight: 400;\">Being proficient is one thing. However, let&#8217;s face it, a business owner has a million other things on his mind. Business changes, but accountancy<\/span><\/li>\n<\/ul>\n<p><span style=\"font-weight: 400;\">Accountants also offer fully managed payroll services, including payslips, national insurance, and pension contributions, ensuring your employees are satisfied.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Small business accountancy services are tailored for both new start-ups and established small businesses. These services include company accounts, tax returns, bookkeeping, payroll, and more, all aimed at alleviating <a href=\"https:\/\/realbusiness.co.uk\/improving-employee-mental-wellbeing-reducing-financial-pressures\">financial pressures<\/a> and supporting the success of small enterprises.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Having your dedicated accountant is crucial for personalized support and advice. They will get to know your business in detail, offer tailored services to meet your specific needs and help increase tax efficiency to support the growth of your business.<\/span><\/p>\n<h2><span class=\"ez-toc-section\" id=\"When_is_it_ok_to_do_your_small_business_accounting\"><\/span><b>When is it ok to do your small business accounting?<\/b><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p><span style=\"font-weight: 400;\">At the start of 2019, there were almost six million small businesses in the UK, with this number rising steadily. With the current recession, and more people wanting to generate their income on their terms, small businesses, especially self-employed or freelance businesses are becoming more common.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Self-employed individuals, especially freelancers, are usually fine to manage their books and accounts. If your business aims to maintain a healthy income to support yourself and your family, then you probably don\u2019t need to worry about an accountant. But if your goal is to set up a company that will grow and be financially successful, then an accountant is going to help you achieve that goal.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Alternatively, you might consider using an online accountancy firm, which offers tailored services without minimum contract periods, to help manage your finances.<\/span><\/p>\n<p><img decoding=\"async\" class=\"size-full wp-image-191935 aligncenter lazyload\" src=\"data:image\/gif;base64,R0lGODlhAQABAIAAAAAAAP\/\/\/yH5BAEAAAAALAAAAAABAAEAAAIBRAA7\" data-src=\"https:\/\/realbusiness.co.uk\/wp-content\/uploads\/2021\/02\/shutterstock_2374050341-min-scaled.jpg\" alt=\"Finances plan\" width=\"1200\" height=\"801\" \/><noscript><img loading=\"lazy\" decoding=\"async\" class=\"size-full wp-image-191935 aligncenter lazyload\" src=\"https:\/\/realbusiness.co.uk\/wp-content\/uploads\/2021\/02\/shutterstock_2374050341-min-scaled.jpg\" alt=\"Finances plan\" width=\"1200\" height=\"801\" srcset=\"https:\/\/realbusiness.co.uk\/wp-content\/uploads\/2021\/02\/shutterstock_2374050341-min-scaled.jpg 1200w, https:\/\/realbusiness.co.uk\/wp-content\/uploads\/2021\/02\/shutterstock_2374050341-min-300x200.jpg 300w, https:\/\/realbusiness.co.uk\/wp-content\/uploads\/2021\/02\/shutterstock_2374050341-min-1024x683.jpg 1024w, https:\/\/realbusiness.co.uk\/wp-content\/uploads\/2021\/02\/shutterstock_2374050341-min-1536x1025.jpg 1536w, https:\/\/realbusiness.co.uk\/wp-content\/uploads\/2021\/02\/shutterstock_2374050341-min-2048x1367.jpg 2048w\" sizes=\"(max-width: 1200px) 100vw, 1200px\" \/><\/noscript><\/p>\n<h2><span class=\"ez-toc-section\" id=\"Conclusion\"><\/span><b>Conclusion<\/b><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p><span style=\"font-weight: 400;\">If you do decide to manage your accounting, you should still consider consulting an accountant as you start so that they can help you set up your accounts and any software you use to handle it. An initial consultation will also help you to make planning decisions that could direct your small business decisions for the next few years.<\/span><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Taking the step to own your very own small business is huge, making you responsible for a lot of your own time and money. Many take the understandable stance to recruit as few staff as possible, and an accountant may especially seem like a non-valuable expense considering the budget. However, the US Small Business Administration&#8217;s [&hellip;]<\/p>\n","protected":false},"author":26234,"featured_media":145695,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_mi_skip_tracking":false,"footnotes":""},"categories":[11878],"tags":[11881,11880],"class_list":["post-145692","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-finance","tag-feb-p","tag-p-2021"],"views":6760,"_links":{"self":[{"href":"https:\/\/realbusiness.co.uk\/wp-json\/wp\/v2\/posts\/145692","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/realbusiness.co.uk\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/realbusiness.co.uk\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/realbusiness.co.uk\/wp-json\/wp\/v2\/users\/26234"}],"replies":[{"embeddable":true,"href":"https:\/\/realbusiness.co.uk\/wp-json\/wp\/v2\/comments?post=145692"}],"version-history":[{"count":0,"href":"https:\/\/realbusiness.co.uk\/wp-json\/wp\/v2\/posts\/145692\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/realbusiness.co.uk\/wp-json\/wp\/v2\/media\/145695"}],"wp:attachment":[{"href":"https:\/\/realbusiness.co.uk\/wp-json\/wp\/v2\/media?parent=145692"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/realbusiness.co.uk\/wp-json\/wp\/v2\/categories?post=145692"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/realbusiness.co.uk\/wp-json\/wp\/v2\/tags?post=145692"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}