In the modern age of AI and automated finances, you may be asking: do I need an accountant for my limited company?
Accountants might be seen as superfluous to running a business that already takes care of its accounts through Xero or Sage, for example.
But can you put a price on expertise? You’re not legally required to appoint an accountant, but hiring one makes sense for many businesses.
The modern accountant can provide:
- insight and knowledge into various industries
- an up-to-date understanding of the law, tax and business legislation
- passion for a craft
- tax planning
- saving money!
Let’s look at why an accountant could be the missing piece of the puzzle for your limited company.
When should I hire an accountant for my limited company?
As soon as you feel like you’re unable to manage your current situation – whether that’s due to lack of time, resources or financial insight – there are clear indicators as to why an accountant is a sensible choice.
It’s crucial to stay on top of areas like cash flow and regulations, for example, so that you’re not leaving critical business priorities to guesswork.
Unless you’re a tax expert, you may struggle to know which business expenses to claim or what allowances your company could be entitled to. Your accountant can help you get your taxes right and avoid penalties.
Simply put, an accountant and tax expert has a level of knowledge above even the most seasoned of business owners.
There are some key areas where this expertise is really apparent.
Registering your limited company
If you’re in the process of setting up a limited company, hiring an accountant is a surefire way to start things off on the right foot.
You’ll get assistance registering your company with Companies House, submitting your first set of year-end accounts, and building systems that work for your business.
There’s no legal obligation for you to hire an accountant — but without one, you may find the process more confusing than it needs to be.
A few ways a good accountant can help are:
- making sure you’re registered correctly
- talking to Companies House if there are any issues
- answering your questions and reporting back to you in layman’s terms
File company accounts
You can prepare and file your accounts if you’re confident about managing your business finances solo.
But if you’re unsure, an accountant can help you make sense of your next steps and check that everything is entered correctly. This will save you time and stress and give you the peace of mind that everything has been done correctly.
Provide insight
Sometimes, a set of balance sheets simply isn’t enough. What if you’ve submitted your tax returns on time and your annual accounts are in good order, but you’re still shorter than expected?
An accountant can look objectively at every area of your business finances and assess them to find areas for improvement.
Accounting software has made this easier than ever before, so you’ll both have access to the same information simultaneously, making these conversations swift and efficient.
As a company director, this is vital to staying on top of your business and ahead of the competition.
Stay tax-efficient
Do you want to guarantee you’ll pay the right amount of corporation tax every time on your company tax return?
Tax efficiency is a vital practice for any company accountant – they can help you reduce your tax bill, save you the stress of paying too much tax, and make use of any credits or savings available to you.
Personality matters
It goes without saying that if you don’t get on with your accountant, it won’t be a good fit.
Try and look for a firm with experience in your industry — one which can provide you with the service you need and respond when you need them to.
Small companies tend to pair well with smaller firms – a large firm is unlikely to give you the same attention or care as one with a few dedicated key members.
Make the right decision
Hiring an accountant just isn’t the right call for some businesses. And that’s fine.
Are you just looking to have accounts for your limited company taken care of? Or to get real insight and regular contact with someone who understands your business inside and out?
Taking the time to make that decision will lead to the best result for your business.
As accountants ourselves, we’re always going to bang the drum for hiring one. But that doesn’t mean we think we’re invaluable — after all, no profession is.
“Do I need an accountant for my limited company?” Maybe – give us a call, and we’ll talk to you about your business.
