Do I need an accountant if I'm self-employed?
An accountant can be a helpful guide on your journey as a small business owner. They act as an authority when it comes to the often complex requirements of the fiscal side of a business.
It’s a question that can cause controversy and offense, especially for those small businesses in certain sectors. But it is something that should be considered by each and every person running a business. After all, even larger corporations hire in-house accountants.
Before you guffaw and protest that this is because large businesses have more complex financial and tax activities, accountants can play a meaningful role for even sole traders, ensuring that your business gets started on the right foot. So to answer the question: yes. Accountants are a necessary part of becoming self-employed.
Why is an advisor necessary for self-employed workers?
The best explanation would be to provide an example: you come up with a great idea for a business and you’re excited to get things into gear. So you start researching, buying any supplies that you need, looking for customers, etc.
With a little good luck (or just hard work and good marketing), the first orders start coming in. You’ve started to move your products which means that you’re making money. You start sending invoices and the best part: the payments start coming through and they’re in your bank account!
But you suddenly realise that you’ve forgotten one important step as you were swept up in the momentum of it all - you didn’t register as a sole trader with HMRC. This is to ensure that you’re paying the correct amounts when it comes to tax and National Insurance.
Before you panic, you likely still have time. Self-employed persons must register by October 5th of the second tax year of their business. But as an added element, certain businesses such as construction also require you to register for certain tax schemes, etc. so take some time to look into your industry and ensure you’re registering in full.
When it comes time for your self-assessment, an accountant might start looking like a good idea after all once you begin dealing with asset depreciation and other financial requirements. But if you don’t comply from day 1, it will become a lot more difficult later on without the help of an accountant.
Helping small businesses grow
Is what an accountant is for. Not only to make sure the paperwork is in order when it is that time of year (or quarter) again. An accountant will also take into account the following:
- What regulations, registrations, etc. that you must fulfill
- Help you avoid possible financial complications that could arise from failing to do the above
- Give you a more complete view of your business, particularly in regards to the market you are entering
- Help you develop a strong business plan, a fundamental part of starting a business
- Remind you to follow through. Getting started might seem easy but keeping the momentum and staying on top of things is another matter. In this, an accountant can be a useful guide
As a self-employed person, you’re constantly learning. And in a learning situation it’s always good to have a helping hand to refer to - an accountant can be that in addition to making sure your business stays on track financially.