Should I hire an accountant for my small business?

When it comes to establishing and then growing a brand, business owners are often faced with a magnitude of challenges, from understanding how to get the most out of their finances to dealing with the HMRC.

Accounting professionals are able to support small businesses at various stages of their development, from providing quality business start-up services to get your new company off the ground, to intelligent tax planning and essential company secretarial work. So, should your small business consider hiring an accountant? Below we have put together a list of a few areas you should consider when it comes to deciding if you would benefit from working with an accountant.


If, like many small business owners, you don't think you can afford an accountant, then ask yourself, are you using your time and skills wisely? Could you be dedicating the time you would be spending attempting to learn the ins and outs of business accountancy to other areas of your business that may be a better use of your resources. 

Let's take a look at the following example. If, on average it took you 10 hours to do your taxes, and your hourly rate is £80. Then the total cost of you completing and submitting your taxes would be around £800, and on top of this cost, you will always run the risk that you could have made an error in your submission. Whilst some business owners feel it may be possible to complete the jobs in-house, getting a professional to take care of the time-consuming tasks like trawling through invoices, statements and receipts would most probably cost you less per hour and can be rest assured that an expert accountant is taking care of all the finer details for you. 

Business Structure

Are you a sole trader or a limited business? This is another area to take into account when it comes to considering the possibility of hiring an accountant for your small business. If you are a sole trader, you must keep a tight record of your income and outgoings as well as keeping HMRC updated on your work, paying your national insurance on time and of course, completing your annual tax assessment. With careful use of an excel spreadsheet and a realistic amount of time dedicated to get your assessment right, keeping your accounts in order may not necessarily require a retained accountancy service, but this is up to the individual and their confidence.

If, however, you own a limited business, which requires filing accounts at Companies House and the tax office, including profit and loss balance sheets, the administration is significantly more complicated. It could therefore be worthwhile for you to explore the benefit having a qualified Chartered Accountant could bring to the business. 

Cash Flow Forecasting 

Cash flow is the lifeblood of your business and plays an important role in keeping it afloat, with poor cash flow often being cited as the most common reason for business failure, it is certainly an area to be considered.

A cash flow forecast is a comprehensive document detailing the estimates of money moving in and out of the business, typically over the coming 12 months. This includes your projected income and expenses. Cash flow forecasting is a useful exercise to allow you to set financial goals and targets for where you want your business to be in the future, as well as measuring the impact of changes such as hiring more people or buying new equipment. 

Due to the nature of cash flow forecasting, it can sometimes be a difficult document to get your head around, especially if you haven't seen one before. Hiring an accountant to take care of the legwork and present you with a finalised document highlighting any areas that could be impacting your overall business goals is likely to be your best option here. It may be that once you have seen how they are done and have an understanding of the document that you feel confident to attempt your own in future but starting with a solid base provided by an experienced accountant is always helpful. 

Payroll Issues 

When it comes to payroll, there are a number of issues that can arise for business owners, from getting all employees paid the correct wage on time and administrating incentive or pension schemes, to ensuring tight record keeping is undertaken for your HM Revenues & Customs submissions and taking into account any additional monthly expenses. 

It is entirely possible to set up and administer payroll yourself as a small business owner, however, you will need to be comfortable with knowing your way around a computer. First you need to register as an employer with HMRC and select a payroll software provider. Moving forwards, you will be required to keep tight records across all the areas mentioned above, as well as a couple more and pay HMRC the correct tax and national insurance. With some time set aside to complete these tasks each month you may find you are capable of administrating your own payroll. If you feel uncomfortable keeping on top of every component involved in running payroll successfully or simply do not feel you have the time to dedicate to the matter, then hiring an accountant who is experienced in solving complicated matters and continuously running payroll will be the best option for you.

While there are a number of other areas to be considered when it comes to deciding if you should hire an accountant for your small business, the factors discussed above are a good place to start. If you do decide to proceed with hiring an accountant, you should ensure they are qualified and reputable.

At Keith Graham we have over 20 years' experience in providing a variety of business accountancy services. If you would like to speak to a member of our team to discuss your individual needs then please do not hesitate to get in touch and we will be more than happy to help.