Small limited company: Does it need an accountant?

Yes, like any other business, small limited companies need accounting experts who are professionally trained and competent. Small, limited companies can find the entire landscape of financial management and compliance quite complex. Therefore, such businesses need an accountant, not just for account handling but also to ensure that the business is in sound financial health. The small limited company accountant ensures tax compliance and optimizes financial performance. 

Whether your small limited company is a start-up or is in a state of maturity, an accountant can make a huge difference and help your business succeed. Because they take care of your financial records and offer strategic advice to enable efficiency, you can focus on your core business, letting it grow and achieve operational excellence.

Continue reading as we help you understand why and how hiring an accountant for small limited companies might be beneficial for running your small business.

Understanding Small Limited Companies

A small limited company is registered legally and is independent from the people who run it. As per the Company House, a small limited company is defined as a legal entity matching two of the following characteristics –

• Ten or less employees
• £632,000 or less as turnover
• £316,000 or less turnover on the balance sheet

The owners of a small limited company can be one or more. The owners or the shareholders have limited liability that is equal to the share value they own. Shareholders need to understand their legal obligations. You need to – 

• Ensure compliance with company laws as per the Articles of Association.
• Ensure that you file a Confirmation Statement every year.
• Ensure that you file your individual tax returns and company tax return.
• Pay the Corporation Tax
• Register with the HMRC for a Self-Assessment tax return and file it annually.

Critical Reasons for Hiring Accountants for Small Limited Companies

• Compliance: Small limited company accountants help them operate their business in total compliance with tax laws, adhere to crucial deadlines like filing returns, and protect themselves from penalties and legal issues.
• Financial Planning: Accountants analyze the financial data of the business, helping companies strategize for growth and sustainability. They evaluate data and turn them into crucial insights for preparing actionable plans for the business.
• Cost Efficiency: Professional accountants for small limited companies help businesses avoid unnecessary expenditures as they play a crucial role in streamlining many processes and ensuring that cost-saving measures are implemented for the company’s financial health.
• Time-Saving: Professionally trained accountants can do a better job recording and managing your company’s finances than you do on your own. They help you focus on your business by freeing up your time. Thus, you can strategize to grow your business and let them handle the intricacies of finances.
• Tax Efficiency: One of the best reasons to hire accountants for small limited companies is that they help your business follow all the country’s taxation-related laws. They ensure that your business takes advantage of permissible tax deductions and allowances. Thus, they contribute to maximizing the financial efficiency of the business.

The Role of an Accountant in a Small Limited Company

• Daily Bookkeeping and Financial Record-keeping: One of the critical roles of accountants is to ensure minute detailing and thorough management of a small limited company’s day-to-day transactions. They record purchases, sales, and expenditures, ensuring accuracy at every step. They are skilled in diligent record-keeping, which is a must to ensure the company’s financial health in real time.
• Preparing & Filing Annual Accounts and Tax Returns: Accountants have the onus of preparing & maintaining accurate annual financial statements and tax returns of their clients. Thus, they ensure regulatory compliance with the required laws and regulations in the country. They ensure that critical documents are submitted within the deadlines and help the business avoid penalties.
• Tax Planning: Accountants help small limited companies with tax planning so that they can successfully navigate the complexities associated with tax laws. Compliance with the existing tax regulations is one aspect of their job. They also help implement practical strategies to reduce tax liabilities and strategize for allowable deductions and incentives.
• Financial Forecasting and Risk Assessment: Another critical area of work of accountants is forecasting revenues. Accountants use different tools to predict cash flow and follow the existing financial trends to help companies budget for the next financial year and ahead. They also take responsibility for assessing potential risks and providing insights so that companies can reduce financial loopholes and capitalize on growth opportunities.

Outsourcing Versus Hiring

The advantages of outsourcing the job to specialized accountants are cost savings and the flexibility to adjust as per the needs of the small business. On the other hand, hiring means overhead expenses and costs in maintaining full-time staff. You must also invest heavily in creating a high-tech ecosystem where the latest tools and software systems can be integrated for proper working. Outsourced firms already have state-of-the-art systems in place as this is their core area of work, and they provide accounting services to many clients.

Conclusion

Small limited companies can gain meaningfully with a dedicated accountant, especially outsourced professionals. They help businesses run compliant with tax laws and optimize their financial health. They can be a significant asset to your business. They help safeguard the business from making financial mistakes and help with tax planning, tax savings, and compliance. Outsourced small limited company accountants have the best tools and systems with the right skills to benefit your business in multiple ways and boost success and stability.

Contact Cangaf Accountants for all the accounting needs of your small limited company. We ensure complete tax compliance and protect your business from penalties and fines. Our small limited company accountants are responsible partners in ensuring financial efficiency and growth through strategic planning. We are well aware of your business’s unique challenges and opportunities and offer tailor-made solutions for financial reporting, tax advice, tax compliance, and more.

Get in touch with us today and let us handle your business’s financial workflows while you concentrate on your business growth and success.