Running a business is hard work with a million things to worry about, and always with costs and profit in the back of your mind. It is easy to think that an accountant is just an unnecessary expense when you can do most of it yourself with a spreadsheet and a calculator. No matter the size of your business, be you a freelancer, sole trader, small business or large enterprise, you should always consider hiring an accountant. This blog post will delve into the pros and cons of hiring an accountant and give you some insight into why accountancy is much more than just some numbers in a spreadsheet!
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Should I Hire an Accountant?
There is no legal requirement to have an accountant prepare your business accounts unless your Limited Company is large enough to require an audit. This equates to more than £6.5m in turnover, more than 50 employees and a balance sheet turnover of more than £3.26m. To put a no finer point on it, any business required by law to hire an accountant probably isn’t worrying about the additional costs. But what if you are a sole trader or small business owner?
The benefits of hiring an accountant can often outweigh the costs of doing so by some margin, more so if you also factor in the time required to prepare and submit your accounts to the various agencies that need them, such as Companies House and HMRC. Some banks will also require professionally prepared accounts if you seek to borrow money or get a mortgage to buy a house.
The Pros of hiring an accountant:
- More time to focus on other aspects of your business.
- You know your accounts are prepared correctly.
- Minimize business expenses.
- Reduce your tax liability.
- Manage business assets.
- All your tax returns are taken care of.
- Manage payroll for you and the staff.
- Assist with tax investigations.
- Help with raising capital.
- Help with valuations/selling your business.
Those are just a few of the benefits of hiring an accountant, and whist some of those can be done by you, the main question is, are they being done to the required standard to avoid any tax audits and possible fines.
One of the main benefits of hiring an accountant is that they are aware of the tax legislation and how it applies to your business, and all the benefits that can be had. A common theme in feedback from companies who hire an accountant is the savings that can be had from doing so often outweigh the cost of hiring them in the first place!
There are many pros to hiring an accountant but are there any cons? Of course, not everything has a 100% upside! The main con comes down to costs, be this extra member of staff to recruit and cover salary costs etc. or the annual/monthly fee that an outsourced accountant would charge. Both are tax-deductible, but it is another expense that you need to factor into your budget. This can be hard for startups or small business owners who are already facing challenges with cash flow and keeping the books out of the red!
Summary
As mentioned above, you do not need to hire an accountant to handle your accounts most of the time. Still, the benefits of doing so can far outweigh the negatives, more so when it comes to knowing tax laws and allowances that can be applied to reduce your tax liabilities.
Before you rush out and simply hire the cheapest accountant you can find; however, there are a few things you should consider – as not all accountants are a good fit for your business! Thankfully we have a few other blogs to help you, such as:
- How to Choose the Right Accountant to Invest In
- What Accounting Services Do UK Businesses and Individuals Need?
- Essential Questions to Ask Your UK Accountant Before You Hire Them
Of course, if you are looking for expert accountants for your business, we don’t just blog about it – we are accountants! You can check out what we do by checking our services pages or getting in touch. We are on Facebook, Instagram, LinkedIn, Twitter, or you can email us!