Accounting Services from an Online Accountant

There’s been a significant change in the accounting landscape over the last decade with online accountants such as ourselves emerging to redefine the industry. The technology-driven shift away from traditional accountants has broadened the scope of accounting services provided to the self-employed and small business owners and how they are delivered with digitisation at the forefront.

Accounting is of course much more than just filing tax returns and crunching numbers. It encompasses a wide spectrum of accounting services that impact the majority of business operations and decisions.

Effective fiscal management is essential for the self-employed and small business owners, but this is no easy task. The range of accounting services provided by online accountants give small business owners the support, guidance and expertise to ensure their business finances are expertly managed as well as their tax obligations and optimisation, compliance, strategic planning and much more.

Online accountants also leverage accounting software, such as FreeAgent which we provide inclusive to all our clients as part of our accounting service, with automation streamlining various laborious accounting tasks. But the benefits of accounting software go way beyond mere automation.

In this post we’ll explore some of the key accounting services provided by online accountants, the areas in which they can benefit the self-employed and how accounting software can help.

Making Tax Digital (MTD)

Making Tax Digital (MTD) is the Government’s ongoing programme to digitise the UK tax system. Currently in a phased rollout, Making Tax Digital mandates certain businesses to use HMRC-approved accounting software to fulfil their tax obligations.

Making Tax Digital is already mandatory for VAT and the next phase of the rollout, commencing in April 2026, will mandate the use of approved digital software for self-employed business owners and landlords with income over £50k for Income Tax Self-Assessment.

As part of the accounting service from an online accountant you will receive MTD-compatible accounting software which will ensure that you’re compliant with your MTD obligations. Here are some of the other benefits:

• Automated Tax calculations – Saves you a lot of time
• Improved accuracy – Less chance of errors in your submissions which reduces the chances of penalties and fines
• Digital filing – Your tax returns can be electronically submitted to HMRC
• You’re future-proofed – Adopting accounting software early gets you ahead of the curve and ensures compliance with MTD going forwards

Bookkeeping

Comprehensive and accurate bookkeeping is the bedrock of a good accounting system and though the vast majority of online accountants don’t provide a bookkeeping service, the accounting software they provide as part of their accounting service is transformational in this regard.

Paper-based record keeping is more time-consuming and increases the chances of errors which downstream can result in inaccurate tax returns. It’s also more difficult to retrieve specific records should you need them.

With FreeAgent, the powerful mobile app allows you to do your record-keeping on the go. Receipts can be photographed and uploaded so you can record your expenses as well as other transactions in real-time. Here are some other benefits of digital record-keeping:

• No backlog – Doing your bookkeeping on the go helps to avoid backlogs which can be an issue when filing deadlines are close
• It’s more accurate – The chances of errors and inaccuracies are reduced meaning its less likely you’ll incur any penalties
• Making Tax Digital – Its a must for MTD-compliance
• Organisation – Your records are automatically categorised and can be easily and quickly retrieved
• Disaster recovery – Your records are digitally backed-up to a cloud

Tax Returns and Optimisation

The preparation and the filing of tax returns are a cornerstone of any accounting service. The use of accounting software means your self-assessment tax returns are calculated automatically in the background while you work and can then be validated by your accountant and digitally submitted to HMRC.

Automation streamlines the tax return calculation process which means your accountant can dedicate more time to providing tailored support and guidance on areas such as tax planning. They will be able to implement tax optimisation strategies to reduce the amount of tax you pay whilst remaining compliant with your obligations. An accountant can help with:

• Accuracy and efficiency – Automated tax return calculation saves you significant time and helps improve accuracy
• Averting fines – Improved accuracy and having an expert manage and validate your returns significantly reduces the chances of any errors and resulting penalties, and an accountant will also ensure your returns are filed on time
• Tax-Efficiency – An accountant will ensure that you claim all allowable expenses and reliefs and that your remuneration is optimally structured to minimise your tax liability whilst remaining compliant
• Other taxes – If you operate through a limited company your corporation tax obligations will also be expertly managed as well as VAT obligations for VAT-registered businesses

Payroll

If you’re a small business owner with employees then your payroll obligations add an extra layer to your admin burden which can be complex from a compliance perspective and also time-intensive.

There are various factors to consider including accurately calculating salaries, taking care of pension contributions, compliance with PAYE and Employer’s National Insurance Contributions.

Here are some of the things an accountant can help with in terms of payroll as part of their accounting service:

• Preparation & Submission – An accountant can manage your monthly payroll runs so you don’t have to
• Staying compliant – They will be up-to-date with the latest legislative changes concerning NICs and PAYE ensuring you’re compliant
• Accuracy – An accountant will significantly reduce the chances of errors in your payroll which minimises the chances of fines and penalties
• Cost-Saving – Having an accountant handle your payroll as part of their service can work out cheaper than outsourcing to a payroll firm
• P11D – They will also handle annual preparation and submission of the P11D form

VAT Returns

If your taxable turnover is above the £90,000 mandatory VAT registration threshold, you’ll already be VAT registered. If your taxable turnover is below the threshold, you might be unsure whether it’s beneficial to register voluntarily.

VAT returns have to be filed either quarterly or annually depending on the scheme you’re registered for and the record keeping and calculations can be a challenge for many small business owners, but an accountant can relieve this pressure and handle your VAT obligations as part of their accounting service.

• Expert guidance: They will advise you which VAT scheme – standard, flat rate or cash accounting – is the best for you, and whether VAT registration is beneficial for you if you’re below the mandatory registration threshold
• Reduce costs: You might be paying more VAT than you need to – an accountant will ensure you’re on the scheme that’s best suited to your specific circumstances
• Automation and efficiency – They will leverage accounting software to automatically calculate your VAT returns and validate that they’re accurate prior to filing
• MTD-Compliance – The accounting software you receive will ensure you’re compliant with your VAT obligations in respect of MTD for VAT

Financial Insight and Planning

An accountant will leverage the range of financial reports auto-generated within accounting software to provide valuable financial insight for your business in terms of its financial performance. Cash flow statements, balance sheets and profit & loss statements can all be used to determine financial health and form the basis of ongoing financial planning and strategy to drive growth.

As part of their service an accountant will set financial goals and milestones and create budgets and forecasts to maintain financial control and predict any bumps in the road ahead.

• Structured growth – An accountant will help to set manageable goals and a plan to achieve them to facilitate structured and achievable business growth
• Track progress – Real-time automated financial reporting allows progress towards goals to be easily monitored
• Budgeting – Effective budgeting will keep a tight rein on business finances and can help to identify unnecessary expenses, as well as improving cash flow
• Data-driven decisions – You can make decisions for your business based on up-to-date financial reports that are accessible at the click of a button
• Mitigate threats – With sound budgeting, effective cash flow management, accurate reporting ad monitoring and projections, threats such as revenue fluctuations or cash flow shortages can be foreseen and steps can be put in place to mitigate them

Our Accounting Service

An accountant should always be viewed as a strategic business partner rather than an unnecessary expense or someone to file your tax returns. As part of their accounting service they will provide overarching guidance and support that can make a huge business difference and drive growth as well as relieving you of the pressures of doing your own accounting. There is of course a monthly cost but that can be more than offset by the tax savings they can achieve.

We’re market-leading online accountants and our accounting service is tailored for the self-employed and small business owners including contractors, freelancers and landlords.

We keep things simple and our monthly fees are great value, all-inclusive and fully transparent. You’ll work with your own dedicated accountant who will expertly manage all your business and personal accounting needs. You receive full inclusive FreeAgent access and a same working day response to your queries is guaranteed thanks to our Client Service Guarantee.

To learn more about our accounting service, request a call back or get an instant online quote.