The Importance of an Accountant when you’re Self-Employed

Being self-employed is something that many people specialising in an array of industries strive to become. The prospect of working for yourself, setting your own hours and reaping the benefits when it comes to the profits make those who take the plunge question why they never did it sooner.

With the advantages comes many added pressures and responsibilities when you become self-employed though. A lot of decisions need to be made to allow your business to flourish. And the decisions fall solely on you.

Although a daunting task, it means you can run your business, whether you’re a freelancer or contractor operating under a limited company, a sole trader or a landlord with a portfolio of properties, exactly how you want, making the decisions that work best for you.

One decision that many face is whether to appoint an accountant to help with the financial side of being self-employed. If you run a small business or are otherwise self-employed, then having an accountant can bring many advantages.

Appointing a Self-Employed Accountant

In short, your accountant can free up more of your time letting you focus on what you do best – running your business and offering a great service to your customers and clients.

As your business then grows, your accountant’s input will become progressively more significant, helping to guide you through essential areas like financial reporting, compliance, payroll, tax efficiency, business planning and more.

Above all, a good accountant provides you with the reliable financial information you need to make key decisions, helping your business to grow faster while saving you money.

Do I need an accountant for my small business?

Without beating about the bush, of course you don’t HAVE to have an accountant when you run your own small business. However, unless you are clued up on the ins and outs of HMRC, having one would be incredibly beneficial.

If your business remains fairly small, doing your own accounts can be manageable. However, as your business takes off, your accounting requirements can quickly become too much for you to handle alone. If you are not a trained accountant, this can be costly both in time and money, as you will take longer and may make costly mistakes.

Here are key reasons why self-employed individuals greatly benefit from having an accountant:

1. Expertise in Tax Laws and Tax Planning

Tax laws are complex and ever-changing. Accountants possess in-depth knowledge of tax codes and deductions, and keep on top of any changes for you, so you don’t have to. They ensure that you comply with tax regulations while maximising your deductions, potentially saving you money in the long run. As a self-employed individual, you might miss out on deductions or tax credits without the guidance of an accountant.

2. Timesaving

Managing your finances, dealing with tax assessments, and understanding changing tax laws demand time and effort. With an accountant, they do all that for you, and to a much higher standard than what you could do yourself. This allows you to concentrate on your core business activities, ultimately increasing productivity.

3. Avoiding Costly Mistakes

Mistakes in financial reporting can lead to penalties or audits. HMRC will come down on anyone seen to be submitting misinformation that allows them to take home more than they should be. An accountant can help prevent errors that could lead to fines or legal troubles, giving you peace of mind and allowing you to focus on your work without the stress of potential errors.

4. Utilising Technology

Our accountants are up to date with the latest accounting software and tools. They can streamline your financial processes, making accounting more efficient and accurate. At Gorilla Accounting, all our clients can use FreeAgent as part of their fixed monthly fee, allowing all of your finances to be MTD-compliant ahead of the Making Tax Digital deadline.

5. Peace of Mind

In short, investing in an accountant provides peace of mind. Knowing that your financial matters are handled by a professional allows you to focus on your business without the added stress of managing complex financial details.

The role of an accountant for self-employed individuals is indispensable and the cost of hiring an accountant is an investment that can save both time and money in the long run while allowing you to focus on what you do best – running and growing your business.

When should I appoint a self-employed accountant?

When you’re just starting out

If you’ve recently set up your business and gone solo for the first time – congratulations! It’s a huge achievement. A qualified accountant may be useful in helping you choose which path to take with your business, setting up as a sole trader or as a limited company, and create a business plan to help it take off. An accountant can provide expertise and advice on choosing the right legal structure, setting up business accounts and help set you up with FreeAgent. This way, you can be as organised as possible from the very beginning.

After a few months of starting up

If you want to get the ground running first, choosing to appoint an accountant a few months in can help you ensure your first year is documented as it should be. It’s never too late to sort your business finances, but usually the sooner the better. It is much easier to have everything in place from the start rather than paying someone to find and record years of financial records. In your first year, it means you won’t miss out on deductions and savings.

When you need to deal with HMRC

Depending on your set up, some financial records can be more complicated than others. As a sole trader, you might want to submit your tax returns yourself each year without any third-party involvement. As you gain more and more contracts and clients though, you may want a qualified expert to check your submissions. If you’re a director of a limited company, things are a little more complicated with records of directors, shares, and dividends to manage accordingly.

If you’re being audited by HMRC

If you’ve submitted a self-assessment incorrectly, or not at all, you can be audited by HMRC. This can be extremely stressful and time-consuming, as well as costly if you owe them a significant amount of tax. Having the assistance of an accountant will help you avoid making mistakes in your tax returns and means you can rely on their support during any investigation process.

If you’re buying or selling a business

If you’re taking on a business, growing your own business or selling any assets, it’s important to have an accountant to help look at the company accounts and ensure the details cover existing debts, ownership of assets and anything else that might affect you in the future.

If you’re selling your business, you don’t want any potential purchases to be held up due to issues that may have been missed. An accountant will make sure everything is ready for you to sell up if you’re looking to cash out or retire.

When it all gets a bit too much

There will come a time where you need to start outsourcing jobs, and one of the easiest ones to delegate is your finances to an accountant. If you find yourself spending a large proportion of time balancing the books, you might find it to be much more cost-effective to appoint an accountant.

It’s important to recognise when it’s time to start bringing in additional support to allow that work/life balance that you’ve built keeps at a manageable ratio. An accountant can leave you feeling much less stressed.

Appoint a self-employed accountant

At Gorilla Accounting, our aim is to make your work life much easier. Your dedicated accountant will get to know your business inside out, meaning you can trust them with your finances. That’s why we’re the most trusted accountancy firm on Trustpilot.

Get in touch today by calling our new business team on 0330 024 0406 or join us by filling in our form here.