FAQs for Small Business
FAQs All About Small Businesses and Accountancy
Surprisingly, any small business would benefit from hiring an accountant – and it doesn’t matter how small the business is. Even if you’re just getting set up, there are plenty of things an accountant can do to support a business.
An accountant will look after a variety of essential financial tasks such as registering with Companies House, filing tax returns, bookkeeping and getting payroll set up.
Additionally, an experienced accountant can offer lots of financial support and advice – from deciding whether it’s worth registering voluntarily for VAT registration to the best practices in keeping your financial records in order.
Any small or new business owner is sure to have many questions – and a reputable accountant will be on hand to answer any queries or offer business and tax advice as needed.
No – but it’s recommended!
Running a small business comes with both benefits and negatives, with one major issue being that many SMEs have a small staff load and fewer resources. In this case, it often means tasks like organising financial records for tax returns or other small accounting tasks often fall to the wayside.
Bigger and more established companies sometimes are able to have a dedicated workforce for such financial matters – and sometimes they still end up outsourcing for an accountant!
Missing deadlines, misunderstanding forms or being unable to find the financial records needed for VAT purposes can be a huge pain in accounting and it can lead to hefty fines and losing money too.
A small business would surely benefit from outsourcing such tasks to an experienced accountant who not only understands financial matters better but can dedicate their time to looking after that side of the business without making mistakes too.
Generally, the cost of hiring an accountant can vary greatly based on industry, experience and how much help you actually need.
For example, if you’ve fallen behind with your financial matters and just need an extra hand to ensure you meet the deadline for returning your VAT return, this can be done as easily as hiring a freelance accountant on an hourly basis.
On the other hand, if you want an accountant that can support you long term and help grow your business with valuable financial advice, you’ll want to hire someone on a month by month basis – or even part-time!
On average, many accountants will charge between £50 – £150 per month for the basic accounting services such as filing VAT forms, end of year submissions, bookkeeping and payroll.
This does, of course, depend on different factors.
Many accountants will also offer packages based on what services you require or how often you’ll require their help.
The basic accounting services a small business needs will usually include:
- Bookkeeping (tracking and maintaining a company’s financial records)
- Monthly accounting
- Preparing financial reporting records (tax returns, income statements)
- Software recommendations (particularly for invoicing)
- Payroll services
- Advice and support
These are just the basic account services offered by an accountant but advice and support are one of the most important services that can benefit a small business.
The right accountant will use their years of knowledge and expertise to offer unbiased advice on everything from what accounting software to use to the next steps that are necessary in growing a small business.
Another very important service an accountant will offer SMEs is preparing for and dealing with all those pesky tax and VAT returns! As we mentioned before, by filling such forms incorrectly or missing the deadlines, a business can end up receiving large late payment fees and actually losing money – so it’s just not worth the risk!
An accountant can help a small business in a number of different ways. An accountant will offer a variety of services such as bookkeeping and payroll services, but more importantly, will also offer advice and support.
SME’s rarely have the time or experience to worry about things like submitting a tax return or organising and filing all their financial statements – even though these things are a very important factor of running a VAT registered business!
Often, small businesses have a lot on their plate, so an accountant can take financial tasks off their hand and ensure those forms get filled in thoroughly and conveniently.
Hiring an accountant is also an important step in growing an SME to the next level, as an experienced accountant can offer financial advice, recommend the best software and even advise on the businesses next steps.
A small business accountant will offer the following services:
- Bookkeeping
- Financial management
- Tax and VAT planning
- Dividend and salary planning
- Filing annual accounts, tax returns, VAT and PAYE
- Software recommendations
- Putting together business plans
- SME business strategy advice
- Growth consultancy
- Troubleshooting
- Business and tax advice
If a small business would like to grow the company further, then advice from a knowledgeable accountant will be simply invaluable. The right accountant will steer the business in the right direction and help save time and money whilst doing so!
Outsourcing accounting for small businesses is really important as many SMEs don’t have the same expertise and resources that bigger companies have.
This can be a challenge as it means financial matters fall by the wayside due to not having the time or knowledge to deal with things like tax returns or annual reports. This is also when mistakes happen, which can end up costing money – which isn’t great for SMEs!
Not only will an accountant help small businesses with things like tax returns and VAT returns, but they can also offer reliable advice on all sorts of financial and business matters.
The right accountant will be on hand to help your company save money, avoid wasting time on small tasks and grow in the long run.
Top small business accounting software: which should you choose?
There are many options out there for accounting software, but in reality it comes down to what services your business needs out of the software and your preferences.
Some of the most popular software options are:
Each software should offer services such as creating and sending invoices, submitting VAT returns and general bookkeeping.
Many small businesses and accountants use accounting software to streamline invoices or chasing payments. Although this may seem like an unnecessary cost, especially if your company is just launching, it’s worth investing in good accounting software as it can save a lot of time and money in the long run.
Some of the most popular software used by SMEs include:
Accounting software can also help keep track of accounts, manage finances, pay bills, claim expenses and even submit VAT returns.
Many accounting software offer more or less the same benefits and services, but each has their own benefits and disadvantages.
Xero, for example, is popular for micro-business owners, whereas QuickBooks Self-Employed is especially popular amongst part-time freelancers. Wave is always a very popular choice too as it’s entirely free.
Every business is different which is why it’s worth exploring each software and seeing what works best for you. Your business may be after a simple and easy to understand software that just offers the very basics, or it may need something a little more comprehensive with more features offered.
An accountant will advise on the best software for your business and, in some cases, have their own software preferences that they can set you up on as part of their services.
