Is it worth hiring an accountant as a small business?

Running a business isn’t a walk in the park, and business owners often have a million things to do at once. Outsourcing some services (like your accounts) is a great way to free up some time.

Hiring an accountant is commonplace for medium to large-sized businesses, but many small business owners and sole traders overlook how useful financial assistance can be.

An accountant can save you valuable time and also share important knowledge and information with you about your taxes and accounts—including how you could save yourself some money) .

However, while it might be simple to find an accountant, making sure you hire a good one takes more consideration. You might they can all do the same thing for your small business: save you some time and effort. But finding one that understands you and your company is more important than you realise.

In this article, we’ll explain why investing in financial aid is worthwhile and how you can find a good accountant.

How can an accountant help your business?

What’s the difference between an accountant and a bookkeeper?

How to find a good accountant

When should you get an accountant?

How can an accountant help your business?

If you’re wondering whether hiring an accountant is worth it for your small business if not turning over millions of pounds, then it’s time to understand exactly how they can help you.

You might be an expert in running a business and know everything there is to know about the industry you operate in, but that doesn’t mean you’re a financial genius too. As experts in all areas of finance, including tax, and compliance, accountants can take care of your business’s financial admin while also providing essential advice. 

A good accountant will not only ensure you file your accounts correctly and stay away from tax troubles, but they can also create business plans, forecast your cashflow, help you win loans and grants, and elevate your business. They’ll also help you claim as much as possible on your expenses, leaving you more money to plough into your company.

So, if you think investing in saving money on your taxes, freeing up time to focus on yourself or your company, help with business planning and cashflows, and assistance applying for and winning loans is worth it, then you should consider hiring an accountant.

What’s the difference between an accountant and a bookkeeper?

Before you find an accountant, it’s good to understand how they differ from bookkeepers, as the two roles can overlap.

While bookkeepers and accountants do perform some similar roles, accountants are generally considered to have more of a 360-degree view of all things business finances and how they impact your company’s future. Bookkeepers, however, focus more on the present day to keep your accounts and books in order.

Bookkeepers also cannot file corporation tax returns, prepare management accounts, business plans, or cashflow forecasts, nor can they calculate your capital gains tax. These processes should be left to an accountant.

How to find a good accountant

Now that you know what an accountant can offer and how they differ from other finance professionals, you’re probably wondering how to find an accountant that will suit your company. 

Your accountant will oversee your finances and even play a role in making your business decisions, so the person you hire must be the right fit. But, with so many accountants to choose from, what do you need to consider before taking someone on?

hiring an accountant
Do they have experience working with other companies like yours?

If your business operates within the insurance industry, but your accountant only has experience working for companies in the beauty industry, they might not be the right choice for you. Ensuring your accountant has at least a basic understanding of your industry, current trends, and your customer base is essential for optimal results.

What accreditations and certifications do they have?

You can usually guess the type and extent of experience an accountant has just by looking at their accreditations and certifications. For example, chartered accountants usually have more experience, as they’re required to have completed a minimum amount of exams, degree-level study, and work experience. Possessing this accreditation might indicate that a particular accountant is more knowledgeable. 

A certified accountant, however, is less qualified than a chartered accountant, but that’s not to say their services aren’t worthwhile. Certified accountants have still earned a qualification alongside years of industry experience and can provide excellent advice. They are also likely to be slightly less expensive.

What services are they offering?

When you hire an accountant, you want value for your money, so look for those who offer above-and-beyond basic services. Even if you’re not sure if you need all services on offer, it’s better to have more options than less. 

How much do they cost?

While having access to as many services as possible gives you a great advantage, don’t pay more than what you can afford. Hiring an accountant is well worth it, but spending all of your money to do so, isn’t. 

Make sure you’re making the right decision by asking these 5 questions at your initial consultation:

What are some examples of other businesses you serve in this industry?

How will you keep in touch?

How often will we have check-ins?

Do you have any specialities?

How could you help my business grow?

When should you get an accountant?

No hard and fast rule tells you exactly when you need to hire an accountant, and you can make that decision whenever you see fit. However, as soon as you start to feel out of your depth when it comes to filing your taxes or keeping track of your books, it’s probably time to start thinking about it. 

Hire an accountant when you begin to feel like the amount of work it takes to file your taxes and keep accurate records of your incomings and outgoings is too much. If the work is beginning to eat into your spare time or takes precious time away from working towards your business goals, then you know you’re ready.

They can then advise on the next steps to ensure your business has the best processes and accounting software in place for successful financial management.