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Getting to grips with your finances as a small business owner can feel like a minefield at first. If you’ve asked the question ‘Do I need an accountant for my small business?’ chances are you’re looking to learn how an accountant could help you.
Accountants for a small business can take some weight off your shoulders, by knowing you have an expert at hand to take care of the complicated stuff. Accounting is a powerful tool that can help you to make informed business decisions, comply with regulations and ensure your business is in a healthy financial position.
Here, we’ll reveal the most asked queries and burning questions around accountancy for small businesses, with insights from experts who share their knowledge on the benefits of business accountancy.
The most asked questions on business accountancy
As a small business owner, financial management is crucial to your business’ success and longevity. Small business accountancy brings about multiple advantages to your enterprise - allowing you to assess profitability, monitor your cash flow and make informed decisions.
Below, we’ll answer some of the most asked business accountancy questions in the UK, while leaning on experts to share their insights and expertise too.
What is a business accountant?
Hiring an accountant can alleviate any worries you may have about your business’ finances. A business accountant’s job is to analyse a business’ finances and help the owner make the right decisions. They can support you in various areas of money management, from introducing accounting software to your business, navigating compliance and improving your financial literacy.
As a business owner, it’s likely that your day-to-day is already swamped with the various responsibilities that come with making your business a success. This can make bookkeeping and financial management hard to keep on top of. You can trust a small business accountant to monitor your business’ finances, so you’ll know if you’re making a profit or a loss and what steps you can take to grow your business to new heights.
How much is an accountant for a small business?
Accountant fees for small businesses vary depending on the size of your business and the services you need. For example, if all you need is an individual tax return you can expect to pay between £75 and £350 + VAT. Whereas, if you need more accounting support for services such as bookkeeping, annual accounts and ongoing day-to-day advice, you may prefer to pay for a package that can be as high as £450 per month.
According to Christopher Demetriou, Co-owner and Finance Director at Archimedia Accounts, ‘Small businesses should expect to pay a minimum of £100/month plus VAT for the basics, if it's not a limited company it can be slightly cheaper. If the business is a bit larger, VAT registered, and requires payroll then you can start to pay more. For example, a £250k revenue company with VAT Returns, Bookkeeping, Payroll, Year End Accounts/Tax Return and Tax planning would expect to pay around £250/month plus VAT.’
How much you’ll be charged for small business accountancy will depend on factors such as:
Your annual turnover
How organised your business records already are, which can keep costs down as the accountant will have less work to take care of
The size of your business
What does an accountant do for a business?
Here are just some of the ways an accountant could support your small business:
Bookkeeping: This involves tracking your business’ revenue, how much money you’re making and how this compares to your monthly spend. This can help you monitor how profitable your business is, and where you can turn a loss into a profit.
Business structure: An accountant can help you choose the right business structure for your new venture. The business structure you choose affects the tax you pay and the paperwork you need to file.
Reporting: Your accountant will perform audits of your financial operations, as well as year-end reports and the reports needed for tax returns.
Saving tax: Accountants should know the latest tax laws, as well as ways you can reduce your tax bill (legally, of course!). From using government incentives to any allowances you’re entitled to, they’ll inform you of ways you can save on your tax bill.
When asked ‘What does an accountant do for a business?’, Christopher Demetriou explains: ‘The short answer is most of the things a business needs to do to comply with the law, including VAT returns, running a payroll scheme, auto-enrolment, CIS, creating & submitting annual accounts and tax returns, and doing the directors' personal tax returns. An accountant also does tax planning to save the business as much tax as possible.’
How do you find an accountant for a small business?
So, we’ve covered the benefits of hiring an accountant and how they can alleviate financial management concerns as a small business owner, but how do you find one?
Of course, you could browse through the endless lists of search results for a trusted accountant, but it can be difficult to judge their competency and experience from their website alone.
Here are some tips for finding a genuine, trustworthy accountant for your business:
Personal recommendations: Reach out to your network for their recommendations. Perhaps you know a fellow small business owner who regularly sings their accountant’s praises, or have a friend who relies on an accountant to manage their finances.
Check they’re fully qualified: While there’s no central register of accountants, it’s common for accountants to have passed certain exams and be a member of a professional body. Remember, if an accountant is reputable, they should have no issue providing you with several references, along with their qualifications to demonstrate their expertise and experience.
Professional industry bodies: A professional industry body, such as the Institute of Chartered Accountants in England and Wales (ICAEW), is a great place to turn to if you’re looking for a reputable accountant. This means they have the accreditation of ‘chartered status’, having studied to a high level with professional experience.
Make sure they meet your needs: Don’t be afraid to discuss what you’re looking for from an accountant, both now and in the future, so you can learn how they’ll support your business. You’ll want to make sure they’re the right fit for you and your business’ goals.
Browse the BSC marketplace: To save you the hassle of searching through Google for the right accountant for your needs, why not browse our marketplace? You can find trusted and vetted accountants who would love nothing more than to support you on your journey.
Fees: Make sure you’re happy with their price, how often they’ll charge you and that their fees fit your budget.
Questions to ask an accountant when starting a business
By asking your accountant the right questions, you can get an idea of how you’ll work together and their approach to small business accountancy. The more questions you ask them, the easier it is to judge if they’re the right fit for your business.
Christopher Demetriou suggests the following questions to ask your accountant, to assess if they’re the right choice for your business; ‘“Do you have any experience in my industry? How much tax planning will you do with me (the more they do, the more tax you're likely to save)? How will you partner with me to ensure my business becomes a success (If accountants care enough they can partner with their clients to find out what works in business, and hand this wisdom down to each new client, saving them years of trial and error)?”
Other questions to consider asking an accountant to judge their suitability include:
What is the tax season, and how do I prepare for it?
How do I manage my cash flow?
Does my business have any industry-specific tax regulations?
Should I register for VAT?
How can you help me grow my business?
Conclusion
Small business accountancy is more than just bookkeeping - it can ensure that you adhere to financial compliance, monitor your cash flow and prepare for the future ahead of time to keep your business in good standing. Relying on a financial expert to take care of your business’ finances can give you peace of mind that you’re handling your business finances the right way. From tax planning to forecasting, you can trust an accountant to take care of the complexities so you can focus on nurturing your new business and watching it grow.
Looking for an accountant to support your small business? Browse our marketplace of accountants for small businesses today.