As a business owner, especially a new one, you may be unsure how to handle your business accounts. You could do it yourself or put them into the skilful hands of accounting services. The accounting industry is vast, with different accountants specialising in other areas of finance.
Even if you’re not looking for a full-time accountant or just seeking advice, you can hire an accountant to review your business accounts and advise you accordingly. You may also consider hiring an accountant if you’re self-employed or a sole trader.
In this article, you'll learn all about the different types of accountants and how they can help your business with various financial matters like tax returns, business planning and much more.
The Different Types of Accountants
There are different sectors for accounting. You can get specialist accountants for all different financial situations.
So you know which one to look for, we've compiled a list of all the different types of accountants:
- Bookkeeper: Bookkeeping services are usually in-house at a company or hired directly for private clients. A bookkeeper records and maintains your business's daily financial transactions. Bookkeepers also prepare reports and trial balances to assist the accountants. Some bookkeepers dabble in payroll services, invoice generating and making payments on behalf of the company.
- Accounting technician: The accounting technician's duties practically include working towards collating, checking and analysing financial information. They also administrate payrolls and liaise with managerial staff and clients.
- Tax accountant: Tax accounting services specialist in anything tax-related, from tax returns, tax planning, helping self-employed individuals fill out a self-assessment tax return and other tax-related jobs within a business. A tax accountant ensures that companies comply with tax regulations and creates tax strategies to minimise tax liability.
- Auditor: You can get internal and external auditors. Both prepare financial statements, advise on tax and treasury issues, approve procedures and manage employee financial responsibilities and management policies. They also examine financial records to identify risks or opportunities that could impact the company.
- Chartered accountant: Work in the public sector, public practice or industry and give accounting advice and information about financial records and corporate finance. Some chartered accountants also offer services for forensic accounting, business recovery and insolvency accounting.
- Management accountant: The main focus of management accountants is monitoring and assisting in the business's financial planning. They oversee the team of accountants if there are several.
- Investment fund manager: Handle the financial side of trust funds, private equity, short-term and long-term investments, debt, pensions or real estate. An investment fund manager handles financial accounts on a client's behalf. Some responsibilities include managing finances and assets and working alongside financial advisors, banker's insurance agents, money managers and trustees.
- Financial accountant: Takes care of financial reporting and offers recommendations after an internal or external audit. The reports will include monthly-end and year-end accounts for senior management. They have helped influence business profitability through financial analysis with recommendations and forecasting.
- Payroll manager: Oversees payroll, such as advising on tax and employment laws and making salary calculations based on overtime, holiday and potentially sick pay. Payroll managers are responsible for issuing BACS payments to employees and ensuring payroll procedures run smoothly.
- Public financial accountant: Worked for civil service, managing financial planning and allocation of resources for government departments.
- Forensic accountant: Forensic accountants investigate if a business or organisation has inconsistent or missing information concerning their financial management and information.
- Cost accountant: Reviews and analyses a company's manufacturing costs. They help cost projects for companies.
How Accounting Services Help Your Business
You may be wondering where you and your business fit into all of this, and yes, there are various accountants for different things. There are ways they can improve your business financial management.
They will take the burden of the following tasks from you:
- Tax returns: Whether you're a limited company with Companies House or a sole trader, you can get help with a self-assessment or business tax return.
- Tax planning: Tax and compliance can be complicated and timely; a professional accountant can help you plan your taxes accordingly and sort out any tax returns or Corporation Tax that may need to be paid.
- Provide sound advice: Accountants can help give recommendations and feedback on your finances. They may even introduce you to new accounting software to ease the workload in your business.
- Managing the entire finance system: If you're a small business, you may need an extra hand with finances. An accountant can manage your whole financial system, allowing you to dedicate time and effort to other business areas. Accounts take care of your finances and will advise you accordingly to ensure your business reaches its full potential.
Pros and Cons of Using Outsourcing Accounting Services
Before we explore the costs of accounting services, you must know both the pros and cons of outsourcing accounting to help you make an informed business decision.
| Pros | Cons |
|---|---|
| ✔️ Improved business processes: Accountants will help you improve your business performance, from making data entry more seamless to assisting various reporting areas. An accountant will give you feedback on the areas that need improvement so you can accelerate your business's finances more efficiently. | ❌️ Unexpected costs: If the scope of work hasn't been appropriately described, or there is more than you anticipated, extra charges could be added to the fixed fees. To avoid this, you should explain the best you can the scope of work to your preferred accountant. |
| ✔️ Peace of mind: Accountants have tax services, planning, cash flow, and financial reporting expertise. Outsourcing your accounting needs will allow you to focus on other business areas and give you confidence in knowing your financial projections, tax obligations, tax savings, and other finance-related business is being taken care of. | ❌️ Better alternatives: If you're a sole trader or at the beginning of your business venture, you may find more benefit from doing your own accountancy tasks using accounting software or an app with cloud-based accounting software. If you're self-employed, your tax load will be lower as you just need to make your self-assessment tax returns. |
| ✔️ Cost-effective: Outsourcing an accountant costs less than hiring an in-house accountant, as there are no recruitment costs, and you don't have to add them to the payroll or make employee deductions. Instead, there is usually a fixed fee that you have to pay, and there are no hidden fees or costs. | |
| ✔️ Time-saving: Accounting and bookkeeping can be timely, and if you're new to handling finances, it may take you even longer than expected. If you hire a professional accountant, they will take that burden and be able to do it promptly. | |
| ✔️ Financial advice: If you require some advice for getting a business loan or need help with Corporation Tax returns, you can hire accountants on a service-by-service basis from accounting firms to help assess your business records and help you make more informed financial decisions. One-time accountants are ideal for small businesses looking for some guidance. |
How Much Does an Accountant Cost?
Accountancy fees will vary between sectors and your business needs. Several factors will be taken into consideration by your potential accountant that will influence the cost of services.
The price may vary depending on the following factors:
- Being a limited company: Limited companies typically have more complex needs than registered sole traders, for example, and have harsher accountant rules. The bookkeeping system must be more comprehensive, so the accountant's cost is typically higher. Limited companies need additional services like tax accounting and financial reporting, which must be sent to HMRC and Companies House.
- Continuous or one-off service: The price of accounting services will vary depending on how much work your business needs to do and how often.
- Business size: Your business size is determined by your annual turnover, so the tighter it is, the more you can expect to pay. The more your company makes, the more work is involved regarding tax and accounting workload.
As well as the above factors, the cost of an accountant will vary depending on whether you get a well-experienced accountant or someone starting. The accounting cost will also depend on the type of accountant you hire.
Some accounting services have a fixed fee, whereas others may charge depending on the workload. Typically, you can expect to pay as follows:
- One-off accounting services: You can expect to pay around £25 to £35 an hour for typical one-off fees, but this will vary on a service-to-service basis. A one-off service is a fundamental level accounting task. For a one-off self-assessment or tax return completion, you can expect to pay around £300; if your business's income is inconsistent, it may cost more.
- Comprehensive accounting: Depending on the business size, you can expect to pay around £150 to £400 monthly for comprehensive accounting. You may find some accountancy firms over small business owners' accounting packages. You may look at around £600 monthly if you have a large business.
Some accountants will want you to pay a monthly fee, while others may require annual pay. You should agree to that when you meet your accountant for accounting preparation. You will need to discuss if they'll be doing annual accounts or giving you monthly reports on your finance and business plan.
Final Thoughts
There are a lot of factors to consider when looking for accountancy services. When looking for an accountancy firm, you need to consider if you want someone to look over your finances once a month or help point you in the right direction with a singular appointment.
