When it comes to hiring an accountant, entrepreneurs often make these 5 assumptions…
Running a small business or freelancing in the UK comes with its fair share of challenges, and one of the common misconceptions that often holds entrepreneurs back is the belief that they don't need an accountant.
Even if you’ve only recently gone self-employed and aren’t yet turning over a profit, the team at Smarta would like to encourage you NOT to dismiss the idea of hiring an accountant until we’ve debunked five common myths.
Myth 1: Accountants are Expensive
Traditionally, accountants have been seen as a costly luxury, reserved for large corporations with seriously big bank balances. While it's true that accountants charge for their services, the value they provide can significantly outweigh the cost, as our co-founder Ian Straker found out in his startup days.
"When I first started out, my impression was that accountants were expensive and wouldn’t be worth the money, so I did all the self-assessment stuff myself. How wrong I was!
When I finally approached an accountant they a) took all the hassle and worry away from doing the self-assessment, and b) saved me more money in tax than it actually cost to pay them because they knew how to do it properly."
Accountants really can save you money by optimising your tax strategy, identifying expenses you can legitimately deduct, and preventing costly financial mistakes.
These days, many accountants offer flexible pricing options tailored to the needs of small businesses and freelancers - like Smarta’s accountancy partner, Crunch. You can find Crunch on the Products section of our website.
What makes Crunch stand out is the fact you can access practical in-person support, to guide you through the complexities of small business accounting. There’s free support available, but when you sign up to a paid plan with Crunch, you’ll be assigned a dedicated account manager who can help you get set up and resolve any queries you have. You’ll also have unlimited access to qualified accountants, without the expense of hiring your own. They can keep you on track with things that commonly trip small businesses up - like when you become liable for quarterly VAT returns.
So, rather than seeing accountants as an expense, consider them an investment in the financial health of your business and your own personal wealth and wellbeing.
Myth 2: Accountants are old-fashioned
There's an app for everything now, right? So why would you need an accountant when you can do their job yourself on your phone?
In a common assumption that digital technology has made accountants obsolete. While there are numerous financial apps and software available, they can't replace the expertise and personalized guidance of a professional accountant.
The job of an accountant is to stay up to date on the ever-changing tax laws and regulations, ensuring your business remains compliant and avoids costly penalties. They can also provide valuable insights into your financial data, and what’s happening in the wider economy, helping you make informed decisions.
Apps can be useful tools, and Crunch provide easy and intuitive software for their clients, offering you the ability to invoice in a couple of clicks, snap-and-save receipts, auto-matching bank transactions with business activity, and more. But tools like these are best used as well as, rather than instead of, a qualified accountant.
Myth 3: Only large companies need accountants
You might hold the belief that accountants are only necessary for BIG businesses with complex financial structures. In reality, businesses of all sizes can benefit from professional accounting services - even if your business is currently just you!
Small businesses and freelancers often face unique financial challenges, such as managing cash flow, minimising taxes, and navigating regulatory requirements. Accountants can tailor their services to meet the specific needs of your small business, helping you maintain financial stability and plan for growth.
If you’ve been struggling to balance your books, thinking accountants are exclusively for big players - it’s time to ask for some professional help! The expertise of an accountant is equally valuable for startups and small enterprises, especially Crunch, who exist to support SMEs.
Myth 4: You only need an accountant if you are a Ltd Company
Nope! Wrong again! Another common misconception is that sole traders and freelancers don't require accountants because their business structures are less complex.
While it's true that sole traders have simpler structures compared to limited companies, they still benefit from professional financial guidance to ensure compliance with HMRC regulations.
Accountants can assist sole traders in managing their income and expenses, ensuring accurate tax reporting, and can support you to navigate the maze of Self Assessment tax returns too.
Regardless of your business structure, an accountant can provide valuable support. If you’re thinking about registering your business as a Ltd company, you may be interested to read this blog by Smarta co-founder Rich Myers.
Myth 5: Accountants only care about how much they can charge you in fees
If you’ve heard another business owner grumbling about how much their accountant charges, it’s possible they’ve not discovered small business specialists like Crunch.
The myth that accountants will do their best to charge you as much as possible overlooks the genuine commitment many accountants have to supporting the small business economy. To get value for money from an accountant, you want someone who wants the best for their clients, and is willing to go above and beyond to help small businesses thrive. They are invested in helping you achieve financial stability and growth, making them valuable partners in your entrepreneurial journey. That’s exactly what makes Crunch a valuable partner for Smarta too.