StartupsStrategy on Why Small Businesses Should Hire an Accountant

Small business owners often have their hands full trying to balance so many different aspects of their company. From inventory, to daily operations, it may sometimes seem overwhelming to undertake every task that presents itself. In my latest interview, I had the chance to chat with the folks over at Read their tips below, on why it’s important for small businesses to hire out for accountant services.

  1. Q: Can you tell us more about

A: was created a number of years ago to provide online accounting services to small businesses. The founders of the company recognised that small companies were paying large market rates for their accounts work which was often conducted by a local high street accountant. Cheaper Accountant has taken advantage of online and electronic technologies to offer an internet based service at the fraction of the cost of a traditional high street accountant.

Cheaper Accountant is a low cost leader within the accounting industry and this business strategy allows all clients whether a limited company or a sole trader to receive extremely competitive rates for all of their accountancy work.


  1. Q: What are some of the services that you offer?

A: We offer the full range of accounting services required by our small business clients. This includes annual work such as Annual Returns, Annual Accounts, Self Assessment Tax Returns and Corporation Tax Returns; quarterly work such as VAT Returns; as well as monthly work such as Company Payroll and RTI submissions. We only provide ad hoc personal and company tax advice and a large part of our accountancy work involves advice on tax efficient business structures and general tax reduction advice.


  1. Q: What does a typical client look like for your company? Can anyone sign up, or is it mostly dedicated to serving UK entrepreneurs?

A: We typically complete accounting work for small business clients across the UK. We only provide accountancy services to UK based individuals or UK based limited companies. Since a UK limited company can be run and owned by anyone outside of the UK we do work with international clients with this client base representing around 25% of our client base.

A typical client will have annual turnover anywhere from £1,000 (sometimes nil) to £800,000. Our clients are usually limited companies with one or a small number of shareholders. The industries within which our clients operate are taxis, tattoos, printed media, tech companies, media, acting, blogging, online sales, contractors and construction to name a few.


  1. Q: Sometimes entrepreneurs try to do everything themselves and get overwhelmed. What are a few reasons why they should hire out for accounting services?

A: There are a number of reasons why entrepreneurs should hire an accountant. Firstly, company accounts must be submitted to HMRC in iXBRL format and only specialist accountancy software used by accountants produces the required format. It would not be cost efficient for an entrepreneur to purchase this software themselves as the software is very costly and far more expensive than using an accountant.

An accountant is best placed to advise on how income tax can be reduced and this often involves complex tax matters that non-accountants may struggle with. In fact, the tax savings can often be far larger than the fee paid to the accountant which represents a good return on investment.


  1. Q: A lot of entrepreneurs work from home nowadays. What are a few tips you have for business owners like this?

A: An individual working from home can be in a fairly unique position as there is no clear separation between the home and the workplace. This opens up opportunities. The genuine costs associated with working from home can be used to offset company profits and in turn reduce business taxes. There are specific rules associated with the utilisation of such costs and an accountant can advise you on this and handle such matters on your behalf.

Anyone working from home should also remember that the home can be considered to be the place if business. This means that any travel you might need to undertake to clients our customers may be considered a legitimate business expense. Again this can be an attractive method of offsetting company profits and in turn reducing company taxes. The mileage rates available can be seen to be somewhat generous in this respect.

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Jan Hines

A startup nerd and compulsive writer, Jan provides streamline information on the hottest trends and news.

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