Does a new company need an accountant?

Whether you run a business as sole trader, a private limited company, or a partnership, you are under no legal obligation to use an accountant, unless your company requires an audit. However, for most businesses, especially new businesses where the owners may be inexperienced in accounting and tax matters, the benefits of hiring an accountant far outweigh the perceived downside of paying for this specialist service.

If you are confident in your own ability to take care of the financial side of things and/or you’re a freelancer with straightforward income and expenses, you may never need to use an accountant. But this isn’t the case for the majority of companies. The reality is that most businesses save money by using an accountant, so their services often end up paying for themselves.

What can an accountant do for my new company?

The role of an accountant involves a great deal more than a bit of bookkeeping and preparing annual accounts and tax returns. Very few businesses achieve their desired success and growth without input and help from an accountant.

Aside from reducing your own workload and freeing up valuable time to focus on running your company, spending a little bit extra on a good accountant will provide you with a number of benefits, such as:

• helping you to write a solid business plan and get funding
• helping you to set up and navigate accounting software
• maintaining accurate financial and accounting records
• dealing with tax registration
• working out your expenses and allowances
• preparing and filing Company Tax Returns and Self Assessment tax returns
• advising on the most tax-efficient way to pay yourself through a company
• guidance on dividends and shares
• managing PAYE and payroll
• dealing with complex VAT requirements
• lawfully minimising your tax bill
• making valuable savings and improving cashflow
• providing general business advice
• making projections and advising on future growth
• staying on top of relevant trends and regulations (business, technology, financial, accounting, and legal)
• ensuring that your company is compliant and avoids hefty fines and penalties
• providing professional references

Essentially, an accountant ensures that you have the financial information you need to make important decisions, run your business efficiently, and gain a competitive edge over other businesses. They can identify areas of concern and blind spots, help you to avoid common pitfalls, save you money, and help you to grow your business at the right pace.

See also: At a glance – annual accounts, tax returns, Corporation Tax and Self Assessment

Accountancy is a complex field that requires many years of study, so it’s important not to underestimate the work that is involved – and the often complex compliance and regulatory requirements of running a company. These are the reasons why most businesses feel more confident having a professional dealing with such matters.

Even if you decide to do your own accounting…

However, if you do decide to manage your own bookkeeping and accounting, it would still be worthwhile consulting a reputable accountant before you start your business – or even to review your financial position at the end of each year.

For a one-off fee, an accountant could help you to set up your accounts and software, provide essential advice on financial planning and tax savings, and give you a better understanding of your legal duties and responsibilities.