Should I Get an Accountant Before Starting a Business?

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Starting a business is a huge step in your professional life, and it can be both exciting and overwhelming. With so many things to think about, from market research to product development, it’s easy to overlook some of the more administrative tasks and financial responsibilities. Although it’s not a legal requirement to have an accountant before you start a business, an accountant can provide valuable guidance on important financial and tax-related decisions, help with setting up your bookkeeping system and offer insights into the financial health of your business. They can also help you understand the legal and tax obligations associated with running a business and help you avoid costly mistakes.

On our website we have an extensive library of business and accounting blogs and we are just a click away from supporting you through starting your own business.

So, let’s get into just some of the reasons you may want to have an accountant before starting a business…

Legal structure and compliance

When starting a business, it’s important to choose the right legal structure and make sure that you’re in compliance with all the necessary requirements. An accountant can help you understand the different legal structures and the advantages and disadvantages of each. Should you be a limited company or a sole trader? Or maybe a business partnership is a better option for you? An accountant can chat to you about these things. They can also help you make sure that you’re in compliance with all the necessary legal requirements, such as registering your business and following all the relevant laws and regulations.

Cash flow forecast

An accountant can help you with cash flow forecasts by analysing your financial statements, identifying trends, and making projections based on your past performance and/or future expectations before officially starting your new business. They can also help you develop strategies to improve your cash flow by managing expenses, maximising revenue, and optimising your financial processes. Additionally, an accountant can provide insights into the financial health of your business and help you make informed decisions about investments, financing, and other financial matters that affect your cash flow.

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Building a long-term relationship

Building a long-term relationship with an accountant can provide you with a valuable resource for financial planning, advice, and support, while also helping you stay compliant and save money over time. Over time, your accountant will become more familiar with your business operations, financial history, and goals, which can lead to more personalised and effective advice. If you start working with your accountant while you are still a very small business or even at the stage when you’re just planning things, you will both have time to get to know each other and see whether you will both be happy in this business relationship long-term.

Provide clarity on what is and what isn't needed

An accountant can provide clarity on what is and isn’t needed in your business. You may already worry about registering for VAT, but should you? Maybe your time will be better spent doing other things at this stage. What address should you use to register with Companies House if you’re opening a limited company? We’re sure you have lots of questions regarding your new business venture.

Once you start running your dream business, a professional accountant will help you by analysing your financial situation, evaluating your business processes, and providing ongoing advice and support to help you optimise your financial performance. You don’t want to be drowning in piles of paperwork and focusing on things that aren’t that important.

They can also review your financial statements, such as balance sheets, income statements, and cash flow statements, to identify areas where you can cut costs, increase revenue, or improve your financial performance. They’ll also be able to advise you on whether worrying about accounting or payroll software should start now or if there are more important things to focus on at this stage, etc.

Expert advice and support

Finally, an accountant can provide you with expert advice and support as you start and grow your business. They can answer many questions you have and provide you with guidance on a wide range of topics, from tax planning to financial management. With their knowledge and experience, they can help you make informed decisions that will have a positive impact on your business.

Hiring an accountant before starting a business is a wise decision that can have many benefits. We understand the challenges and obstacles you deal with every day as a business owner, and we would like to help make that a little easier. But maybe you’re worried about the cost of working with an accountant? We provide personalised pricing for our accounting and bookkeeping services, so you can find a suitable arrangement to accommodate your modest needs at this stage.

If you have any questions about working with an accountant, book an initial call with our Oxford-based accountants who will be more than happy to discuss possible arrangements with you.

Frequently Asked Questions

The size of your business shouldn't be the only criteria to assess whether you need an accountant or not. The question is rather do you know what you're doing when it comes to taxes, do you know how to report to HMRC or Companies House and do you have time to learn about these things and do these things yourself? You may be worried that as a small business cost of hiring an accountant can be enormous. But lots of accountants offer personalised packages that can grow with your business. So you can start very small and with some ad-hoc advice and then change your accounting package when you start growing. And the sooner you start building the relationship with an accountant, the better. Because one day you may need them quite urgently and taking the first available accountant when you're desperate, may not end up that well...

Self-employment is seen as the most straightforward way of running a business. It is the easiest legal structure in the UK in terms of registering a business because it's quick and you can literally start working for yourself any time. But self-employed people have to do taxes, maintain their business records and do VAT returns if they're VAT-registered. You also have to do payroll if you employ others. So it's not necessarily less work than with a limited company. And your tax situation may not be the most straightforward. If you don't know much about taxes, aren't confident in using accounting software or your situation is just more complex, you should consider having a professional accountant if you're self-employed. 

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