Running a small business means that you have to wear many hats. For example, if you sell products then you are the designer, creator, social media manager, customer service advisor, photographer, email marketing guru, dispatcher, website designer and search engine optimiser all in one. There is always so much to do, including doing your own accounts. If you run a small business then do you need an accountant?
Legally, if you are registered as a sole trader then you do not need an accountant to submit your annual tax returns via self-assessment, and there is even plenty of software out there to help you to do this.
One thing that puts a lot of small business owners off using an accountant is the added cost. When you are running a small business then every penny matters, and you might think that you don't need to fork out for an accountant for something that you can do yourself every year.
This is exactly what I thought when I was running my business as a sole trader. I couldn't see the benefits of paying for an accountant until I formed my Limited Company and needed to have an accountant to do our annual returns. Since then I can really see the value of using accountants for a small business.
The benefits of using an accountant as a small business
A good accountant does a lot more than your annual tax returns. They can also help you out with questions, keep on top of the legislation around tax and compliance as well as help you to save money. Some accounts are members of accountancy organisations and therefore get Accountancy organisation benefits helping them to provide you and your small business with the best possible service.
For small business owners in the retail industry, having an accountant with expertise in retail accountancy can be especially beneficial. Not only can they assist with general accounting tasks, but they can also provide insights on inventory management, pricing strategies, and other industry-specific financial matters. By leveraging their knowledge and experience, a retail accountant can help small businesses maximize profits and minimize expense.
A good accountant will:
Navigate VAT, and complete your quarterly returns for you. They will monitor your turnover and let you know if and when you need to become VAT registered. Once you have become VAT registered they will help you to be compliant, charging VAT to the right customers and on the right products.
Offer bookkeeping as a service to save you time when you could be creating more products or working on growing your business.
Provide you with accounting software that connect to your bank account(s) and Paypal account. This means that you can easily show where money has come in from, but also where you have spent money. Your accounting software will also allow you to run reports, for example, to see how much money you are spending on marketing or supplies.
Choose the right business structure for your business – especially answering that difficult question ‘when should I form a Limited Company?”. If they recommend that you form a Limited Company then they can also help you to navigate and fulfil your duties to Companies House.
Run payroll for you and any other employees in your small business, including working out tax and National Insurance contributions.
Don't be scared to approach an accountant to consider working together. Most accountants will offer you a free consultation so that you can ask your questions and decide if using an accountant is right for your small business.
