As a small business owner, choosing the right financial assistance can be a challenging task. While some entrepreneurs may opt to do their accounting, others prefer to outsource this task to a professional accountant. But how do you decide which option is best for your business? In this article, we will list seven questions to ask yourself before deciding whether you need an accountant for your small business. By answering these questions, you can make an informed decision that will benefit your business’s financial health in the long run. 

1. Can I be my own accountant?

What’s your accounting knowledge? How well do you understand single-entry and double-entry bookkeeping? Or FIFO/LIFO? If you can’t answer these questions, that´s usually a good indication that you may need an accountant. When it comes to tax and compliance, you need to know what is expected of you or you may face some hefty penalties.

2. Am I tech-savvy?

You use apps and computers, but you’re not an “expert”? Maybe you´re still tracking income and expenses in Excel? While there is accounting software for beginners, maximising the use of it and using it to swiftly generate revenue statements, reports, invoices, and expenses, is an accountant´s forte. 

If you are quite tech-savvy, is it worth your time to manage your finances yourself? Or would that time be more valuable spent on your marketing or business development? Beyond helping with your finances, accountants can also help you implement tech to increase the efficiency of your business as a whole.

3. What can an accountant provide?

Accountants play a crucial role in bookkeeping, payroll, and tax compliance. They can also handle complex jobs, including data administration, financial analysis, and financial report generation. As well as managing everything finance, some accountants also offer business advisory services, financial planning and forecasting.

4. Is there time to do my business’s accounting?

Only you can answer this question. If other tasks are falling down the priority list – your clients want your input, emails are piling up, the phone rings nonstop, or you never have time to get around to thinking about and developing your own business – the answer is you don´t have time. If this sounds familiar, delegating this duty to an accountant will give you time to focus on the more important tasks.

5. Are accountants affordable?

Accountants have no set fee; they vary depending on their level of experience and the services they offer. However, most accountants are affordable and can help you save money in the long run by identifying tax deductions and providing financial advice. It’s important to consider the potential cost savings and benefits of hiring an accountant when evaluating their affordability.

According to research, the average accountant salary in the U.K. is £36,000 per year or £18.46 per hour. Entry-level positions start at £28,500 annually, while most experienced workers make up to £50,000 annually.

6. Can I hire a part-time accountant?

Yes! You can hire a part-time accountant for one or two days a week and agree on the deliverables. For example, they may spend half their time on the books and paperwork, and the other half on accounting strategy discussions with you. They can also advise on how to best use your company’s finances for resources needed to stay profitable.

7. Can a bookkeeper be my accountant?

Bookkeepers and accountants have similar but distinct tasks. Bookkeepers record daily financial transactions, while accountants analyse and prepare taxes. Bookkeepers can prepare financial statements, but they are not trained accountants. Assess your business’s needs and contact a professional to determine if a bookkeeper, accountant or both are needed.

Need help?

Deciding whether to hire an accountant for your small business is a crucial decision that can impact your financial health in the long run. By asking yourself these seven questions, you can evaluate your accounting knowledge, tech-savviness, available time, and financial resources to determine whether hiring an accountant is the right choice for your business. 

Ultimately, an accountant can provide valuable support and guidance in managing your finances, staying compliant with tax regulations, and making informed business decisions. Whether you decide to hire a full-time or part-time accountant or simply leverage accounting software, taking the time to evaluate your needs can help you make the best decision for your small business.

If you need help or want to discuss your business needs, don´t hesitate to reach out! We´ll happily talk you through your options.