When & How to Hire an Accountant – A Small Business Guide

There are many reasons to hire an accountant for a small business. From the formation of your company to a loan application, an accountant can help you in each step using their expert financial knowledge.

You don’t always need to hire an accountant for full-time sometimes just a couple of hours will be enough.

An accountant can be handy when doing time-consuming tasks like taxes business restructuring. This way, you’ll get more time to focus on other business-related things.

In summary, the accountant remains essential at every business stage. Its role keeps evolving; nevertheless, importance stays same as shall we see below.

We have made a small guide for you to know when and how to hire an accountant so let’s have a look.

When starting your business:

When you are starting your business, you need to look after so many things like planning of your business strategies, financial strategies.

Hire an Accountants

Hiring a tax advisor or an accountant at an early stage of your startup would be very beneficial. With the expertise in finance, an accountant will guide you in financial aspects, how to structure your business (company, sole trader, partnership or hybrid) and to write your business plan. They will help you with bank account opening, VAT registration, setting up a PAYE scheme. They will also keep you updated with financial rules and regulation, for example, FCA.

When your business grows:

There are many difficulties you will face if your small business is in the growth stage or making a transition from a startup to a growing business.

The sudden influx of customers can have a significant impact on your business’s accounting.

In such situations, it’s always advisable to hire an accountant to prevent or manage the upcoming loss.

An accountant will take over all the financial aspects from you and guide you through creating a business plan.

If you hire an accountant on growth stage, then you can focus on the growth strategies of your business.

For guidance when filling tax:

Filling tax returns is a very complex process, especially for a business with more moving parts and legal reporting requirements.

If you have an accountant by your side, then he will guide you with your personal and business tax returns.

They will also help you save tax by accurately classifying tax deductibles.

Before making a business acquisition:

If you are planning strategies to grow your business through acquisition, then you will undoubtedly need the services of an accountant.

An accountant can analyze the financial situation, advise your funding option, payback periods, assisting in doing the due diligence of your target business, and budgeting. An accountant will also help in aligning new acquired entity’s accounting systems with yours so that you can get an overview of the results of combined businesses.

To manage cash flow:

If your business operates from a thin cashflow or you always need to dip in overdraft, then cash flow management is critical. Poor cash flow management can lead your business to collapse.

If you hire an accountant, then they can help improve your financial situation by giving cash flow predictions and by analyzing cash flow trends. This analysis will highlight opportunities where you can save cash.

By cash flow forecast, you can plan for any upcoming shortfalls and can identify whether you need to borrow money or raise new finances.

When you are applying for a loan:

It is very beneficial to have an accountant by your side when you are applying for a loan.

Lenders want to see that you are financially responsible, and some lenders require that you have an accounting solution for your business to be eligible for a loan.

Because of COVID-19, lenders require detailed financial projections and forecasts for bigger loans- the Coronavirus Business Interruption Loan Scheme- CBILS.

When you need business analysis:

If you are not able to keep track of your money due to lack of knowledge and time, then it’s time to hire an accountant.

Accountants are experts in business analysis advanced reporting.

They can help you give financial reports and analysis, which will help you get your business’s financial insight. These reports can be according to the business segment, geographic location, product or segment.

You can take advice from accountants and use it to improve your business.

When you need expert business advice:

You can always turn to your accountant when you require expert business advice. For example, setting up new lines of businesses or start exporting globally.

So, hiring an accountant to assist with such a move can be beneficial for your business.

How to Hire an Accountant for your Small Business?

In simple words figure out these things first,

  • What you need your accountant to do for your business?
  • Which type of accountant your businesses require?
  • How to connect with accountants?
  • What to look for in a good accountant?
  • What questions to ask an accountant?

It’s easy to hire an accountant nowadays. With the use of technology, you can put, “accountants near me” in the search engine and will get a list of accountants.

There are several things you also should keep in mind before hiring an accountant like their qualification, experience, location, professional indemnity insurance cover, practising certificates and fees.

Choose a good accountant who can help grow your business, contact more than three accountants, take their interviews and check their work.

An accountant is going to have the complete responsibility of your company’s financial management, so don’t rush in choosing one and take your time to decide.

Websites to help you find an accountant:

You can seek help from an organization like Experlu who are committed to helping you find the best accountant as per your requirements.

All you need to give them your requirements and they will connect you with expert accountants matching your requirements. Choose one of the accountants and start working to grow your business. Their services are entirely free.

Hire an Accountants

Wrapping up:

As you can see, accountants are essential at every stage of your business to help your business succeed. The right accountant will make your life easy by taking out the financial burden from you and will help you focus on the day to day activities of your business. So, hire a perfect accountant if required for your small business and let your company growing smoothly.

123Financials Editorial Team
The 123Financials editorial team is composed of seasoned finance and accounting experts with a combined experience of over 20 years. Specializing in UK finance, accounting, and tax-related content, our team is dedicated to delivering insightful and practical advice to startups and small businesses. With a strong background in both the theoretical and practical aspects of financial management, we ensure that our readers stay informed and empowered to make sound financial decisions. Whether it’s navigating the complexities of UK tax laws or providing strategic financial planning tips, our team is committed to excellence and accuracy in every article.