Do I need an accountant as a small business or sole trader?

Do I need an accountant as a small business or sole trader?

As a small business, sole trader or freelancer, you are not required by law to have an accountant or bookkeeper.

With the increasing popularity of cloud-based accountancy software such as Sage, QuickBooks, and Xero, keeping track of your income, expenditure and submitting your annual tax return has never been easier.

So, as a small business, sole trader or freelancer should you use an accountant? And what should you do if you decide not to use one?

The benefits of using an accountant

When you’re a small business, or you work for yourself, every penny counts, and you might think that an accountant is an expense you can avoid. However, there are plenty of ways an accountant can benefit your business – and potentially save you money.

Here are just some of the benefits of using an accountant:

Saving you time

Keeping track of your income and expenditure is a vital part of running a business. However, every hour you spend on your accounts is time away from the reason you got into business in the first place.

Working with a qualified accountant allows you to spend more time on what you do best: running your business.

Avoiding penalties

Working with an accountant will help you keep on top of deadlines, assist you with preparing your company accounts and tax returns.

Missing deadlines, incorrectly completing forms and not conforming to new legislation could result in fines and interest applied to the amount owed.

Saving you money

Charted accountants are required to keep up to date with the latest legislation and best practices. As a result, they can help you ensure your business is operating in the most tax-efficient way. This can include explaining how and when to pay yourself dividends, what can and can’t be claimed as an allowable business expense and registering for VAT.

Just to set some expectations: As a small business, it’s unlikely that operating in the most efficient way will cover the direct financial difference if you were not to have an accountant. However, if you factor in the time you will save processing, researching and recording this information, and potential penalties if you get it wrong, long term, you could be saving a fortune.

What you should look for when selecting an accountant

Did you know that anyone can call themselves an accountant? The term itself isn’t regulated, and anyone can set up an accountancy firm.

To reduce the chance of things going wrong, it’s always advisable to choose someone who’s chartered. Chartered Accountants, or Chartered Certified Accountants, follow a code of ethics and are subject to strict regulation, inspection and oversight from their professional body.

Here are some other things to consider:

Are they recommended?

There are plenty of chartered accountants out there. To help narrow down your search, ask friends and colleagues for their recommendations.

Do they specialise in your type of business?

Your accountancy needs will vary depending on the type of business, and how it’s structured. Make sure you choose someone who’s experienced in helping companies in your industry.

Do they work with you?

It shouldn’t just be about the numbers. Accountants can be instrumental in helping you grow. The right accountant will be invested in your business and want it to succeed as much as you do.

How much do they charge?

Let’s be honest; price is always going to be a significant consideration. However, it shouldn’t be the only factor – cheap isn’t always best. When choosing an accountant, make sure they are open about their pricing and you know what you’re getting for your money. Check what the fees include and if they are fixed costs or an hourly rate.

Are they flexible?

As cloud-based accounting software is becoming more accessible and easier to use, many accountants are choosing to work with you and these platforms. In most cases, working with your accountant will help reduce the fees. It’s always worth checking to see what types of support or packages they offer.

The things to think about if you decide not to use an accountant

Despite all the benefits of working with an accountant, you might choose to handle your accounts yourself. Thankfully, there are various online platforms and support to help you manage things.

Where to get advice and information

If you can, it’s always best to speak to a qualified, chartered accountant in the first instance. They can provide you with some direction based on your unique situation.

The HMRC website contains a wealth of information and advice for all types of businesses. You can also keep up to date will current legislation by signing up to their newsletter.

Use accountancy software

Today, there are plenty of cloud-based accountancy software packages available to help you keep track of your business’s income and expenses.

We recommend you research these thoroughly and pick the best one for your type of business. Some of the most popular accountancy platforms include Sage, QuickBooks, and Xero.

Keeping detailed records

It’s always best to keep accurate records and backup all your documents. Having detailed information can be used to prove your finances if there are ever any problems. And when your business does get to the point of needing an accountant, the handover will be much smoother – and probably less expensive.


If you’re still unsure if you need an accountant for your business, feel free to call us on 0121 550 8525 and we’ll be happy to talk you through some options based on your individual circumstances. Alternatively, send us a message using the form on our contact us page.