What does an accountant do for small businesses beyond preparing figures at the end of the year?
A small business accountant can help keep financial records organised, prepare accounts and tax returns, explain your responsibilities, support tax planning and give you a clearer understanding of your business finances.
The support you need will depend on how your business operates. Sole traders, limited companies, VAT-registered businesses and construction contractors can all have different requirements.
What Does A Small Business Accountant Actually Do?
An accountant uses the financial information from your business to help you meet your accounting and tax responsibilities.
Depending on your circumstances, this might include:
- Preparing accounts and tax returns
- Supporting bookkeeping
- Managing VAT or payroll requirements
- Helping with CIS
- Explaining tax deadlines and responsibilities
- Helping you prepare for upcoming payments
- Answering questions when your business changes
Good accounting support can also be useful throughout the year, rather than only when a deadline is approaching.
Keeping Your Financial Records Organised
Invoices, expenses, customer payments and bank transactions all create financial information that needs to be kept organised.
Good records make it easier to understand how the business is performing and provide reliable information when accounts or tax returns need to be prepared.
An accountant can work with the bookkeeping you already manage or provide additional support where needed.
Learn more about bookkeeping, or read our Bookkeeping Tips For Businesses In Reading for practical guidance.
Helping You Understand Your Responsibilities
Accounting requirements vary depending on your business.
A sole trader may need to think about Self Assessment and record keeping, while a limited company has additional company accounting and Corporation Tax responsibilities.
VAT, payroll and CIS may also apply depending on how the business operates.
An accountant can help you understand which requirements are relevant to you, particularly when something changes.
This could include:
- Becoming VAT registered
- Employing somebody
- Moving from sole trader to limited company
- Starting work under CIS
- Growing into larger contracts
Getting advice before making a change can make the financial administration easier to manage.
Preparing Accounts And Tax Returns
Tax and accounts are often the main reasons small business owners approach an accountant.
For sole traders, this may include preparing a Self Assessment Tax Return using the financial records from the business.
If you need help with your return, see our self assessments page.
Limited companies have different responsibilities, including annual accounts and Corporation Tax.
Our guide to what happens at company year end explains the process in more detail, while our Limited Company page covers ongoing support.
Helping You Plan Ahead
One benefit of keeping your accounting information up to date is having a better idea of what financial commitments may be approaching.
An accountant can help explain which taxes apply to your business and when payments may be due.
They can also help you understand the financial implications of decisions such as:
- Hiring an employee
- Investing in equipment
- Registering for VAT
- Changing business structure
- Taking on larger contracts
An accountant should not make business decisions for you, but having clearer financial information can help you make those decisions with greater confidence.
Supporting VAT, Payroll And CIS
As a business grows, additional responsibilities can appear.
VAT-registered businesses need suitable records to support their VAT returns. More information is available here.
Businesses employing staff also need to manage payroll calculations, records and reporting. Visit our page about payroll for further information.
Construction businesses can have additional responsibilities under the Construction Industry Scheme.
CG Accounting Services has specialist experience supporting contractors and subcontractors with CIS alongside their wider accounting requirements. Learn more here.
Accountant Vs Bookkeeper: What Is The Difference?
Bookkeeping generally focuses on recording and organising the day-to-day financial transactions of a business.
Accounting uses that information for wider purposes, such as preparing accounts and tax returns, reviewing financial information and helping business owners understand their responsibilities.
The two often work together.
Good bookkeeping gives an accountant reliable information to work with, while accounting helps turn those records into useful financial information.
When Should A Small Business Consider Using An Accountant?
There is no single point when every business needs an accountant.
However, professional support may be useful if:
- Financial administration is taking too much time
- You are unsure about your tax responsibilities
- Your business is growing
- You are becoming VAT registered
- You are setting up a limited company
- You are employing staff
- You operate under CIS
- Your financial records are falling behind
You do not need to wait until a problem develops. Asking for help earlier can often make your next steps easier.
What Should You Look For In A Small Business Accountant?
Technical knowledge matters, but so does communication.
You should feel comfortable asking questions and be able to understand the answers you receive.
It is also worth considering whether the accountant regularly works with businesses similar to yours.
For example, a construction contractor may value CIS experience, while a limited company may need support across bookkeeping, VAT, payroll and company accounts.
Having a consistent point of contact can also be valuable, as they can build a better understanding of how your business operates over time.
Frequently Asked Questions About Small Business Accountants
Does A Sole Trader Need An Accountant?
Not necessarily.
Some sole traders manage their own finances, while others prefer support with bookkeeping, Self Assessment or VAT. The right option depends on the complexity of the business and how confident you are managing the administration yourself.
Can An Accountant Do My Bookkeeping Too?
Yes. Many accountants also provide bookkeeping support.
This can be useful if you prefer your financial records and wider accounting requirements to be managed together.
Do I Need An Accountant If I Use Accounting Software?
Accounting software can make record keeping easier, but it does not automatically replace professional advice.
An accountant can help explain how information should be treated and which accounting requirements apply to your circumstances.
Can An Accountant Help With CIS?
Yes, although experience with CIS varies.
If you regularly work within construction, it can be useful to choose an accountant who already understands the scheme and the accounting requirements affecting contractors and subcontractors.
Find The Right Level Of Accounting Support
A small business accountant can do much more than prepare paperwork once a year.
The right support can help you organise your finances, understand your responsibilities, prepare accounts and returns and make better-informed financial decisions.
CG Accounting Services supports sole traders, limited companies, contractors and small businesses with straightforward accounting guidance backed by 10+ years of experience. We also have specialist experience supporting construction businesses with CIS.
If you would like to discuss where professional support could make managing your business finances easier, contact CG Accounting Services to arrange a discovery call.