Hiring an Accountant – A Small Business Guide

Running a small business is not everyone’s cup of tea. Making a business profitable takes everything from your social life to the far end of your multi-tasking skills. While handling products, markets, and people, accounts are just one less thing you should worry about. 

The 2022-23 Tax Gap figures show an all-time high crash, highlighting growing challenges in tax compliance, especially among small businesses. 

Accounting is a sensitive, full-day job that can jeopardise your small business if you are not in capable hands. This small business guide to hiring an accountant will explain what an accountant does for your small business and when and how to find one. 

What an Accountant Does For Your Business?

An accountant does more than you expect. With strategic advice, they devise clever ways to save you money. They help you automate administrative tasks that distract from your core business. Here are some go-to functions that an accountant will handle for you:

• Kickstart your business
• Keep a steady flow of cash
• Manage your debt
• Help you stay Compliant
• Handle Payroll
• Deal with invoices
• Optimise Taxes
• Pass loan applications
• Budget 
• Setup cloud accounting software

When Should You Hire an Accountant?

So, we know what an accountant can do for your business, but how do you know when to hire one? Your business will tell you. 

For example, you notice discrepancies in your financials, but your business isn’t losing money. This is a sign that your books need to be reviewed. 

If you find yourself in any of the pivotal business points mentioned below, you know you need to hire an accountant. 

1. When You Want to Grow a Business

Growing your small business comes with unimaginable challenges. If you hire an accountant to take care of tasks that consume time, like taxes, you’ll have extra time to free you up to generate revenue.

2. Get Advice on Business Plans

If you get an accountant while preparing your business plan, they can use accounting software to add financial projections and other reports.

3. When You Need Company’s Legal Structure

Every business has a different legal structure. When you must structure your business as a sole trader, limited company, or a limited liability partnership, you must hire an accountant. 

4. When You Are Ready to Delegate

Delegating your small business’ financials is good practice. This is the time to hire an accountant you can trust with sensitive business information and let someone experienced handle the work. 

Not delegating crucial tasks means you’re left overburdened and stressed.

5. When Need to Deal with HMRC

When HMRC calls for self-assessment and or compliance check, you know you need an accountant to:

• File the required legal and compliance documents 
• Keep your business up to date with the latest tax laws
• Prepare annual statements of accounts
• Maintain director records 
• Record and organise share allocation
• Handle your payroll 
• Ensure employees’ tax codes are recorded correctly

6. When You Need Advice on a Franchise

It gets tricky for new small businesses to tell whether it’s worth getting on a specific franchise. 

This is where an accountant steps in. They look through pesky franchise contracts for fees and percentage charges and help you estimate the likely income for the cost you will spend. 

7. During Year-End Accounts 

For Accurate and timely year-end accounts, you need to make informed decisions and meet regulatory requirements with the help of an accountant.

How to Find an Accountant

Finding a suitable accountant within your budget is a challenging task. However, there are hidden gems beyond the reach of your local chamber. Here are some unconventional ways to find an accountant.

1. Through Online Search

Look beyond traditional directories. Social media groups targeted advertisements, and freelance platforms offer unique ways to find accountants who suit your needs and budget.

• Social Media (Reviews & Feedback)
• Advertisement Platforms
• Outsourcing Platforms

2. Referrals: Ask People Around You (Expand Network)

Your professional network can help you extend your network. Try considering referrals from:

• Mortgage Advisors
• Solicitors
• Brokers
• Financial Advisors

3. Find Accountants Through Professional Industry Bodies

Certified accountants can be found through these organisations, ensuring they possess the knowledge, experience, and ethics to guide you effectively.

1. ICAEW
2. ICAS
3. ACCA
4. IFA

4. Finance & Accounting Publications

Look for magazines or newsletters from CIMA (Chartered Institute of Management Accountants) or ACCA (Association of Chartered Certified Accountants). 

Consider industry-specific publications like:

• ACCA Advance e-magazine
• ICAEW Accountancy Magazine
• CIPFA Public Finance Magazine
• Tax Journal 
• Accountancy Age

5. Leverage Events & Conferences 

Visit industry-specific seminars and conferences on accounting, finance, or business management. Here are some of the recommended conferences and events:

1. AICPA & CIMA ENGAGE
2. Accountex London
3. The Alternative Accountancy Management Summit
4. Festival of Accounting & Bookkeeping

Get Prepared for Your First Meeting With an Accountant

In your first accountant meeting, consider the scope of your business. Know the number of people in your business, the services you require, etc. 

Ask questions about:

• Fee and charges
• Compliance deadlines 
• Frequency of communications

To get you onboard, your accountant will require some information, such as key documents, National Insurance numbers, and HMRC letters. 

Talk to us, confine what you need to provide, and prepare it as soon as possible.