Accountants for startups and small businesses: Do I need one? 

Starting a business is exciting, but it also comes with a long list of responsibilities, especially when it comes to finances. One of the most common questions new entrepreneurs and businesses ask is: Do I really need an accountant? The answer isn’t always straightforward. It depends on your business structure, your goals, and how comfortable you are managing your own finances. 

In this article, we’ll break down the key responsibilities startups and small businesses face, when an accountant is necessary, and how the right accountant can help your business grow. 

What are the accounting responsibilities for startups and small businesses?

Whether you’re a sole trader or running a limited company, there are several financial tasks you’ll need to stay on top of: 

• Bookkeeping – Recording income and expenses accurately. 
• Tax returns – Filing self-assessment or Corporation Tax returns. 
• VAT – Registering for and submitting VAT returns (if applicable). 
• Payroll – Managing employee wages, PAYE and National Insurance. 
• Financial reporting – Preparing profit and loss statements, balance sheets, and cash flow forecasts. 
• Compliance – Meeting HMRC and Companies House deadlines. 
• Budgeting and forecasting – Planning for future growth and managing cash flow. 
• Funding and investment – Preparing financials for investors or lenders. 

These responsibilities can quickly become overwhelming, especially when you’re focused on building your business. 

Does my startup or small business need an accountant as a sole trader?

If you’re a sole trader, you’re not legally required to hire an accountant. Many sole traders manage their own finances using accounting software like Xero, QuickBooks, or FreeAgent. 

When an accountant might be helpful:

• You’re unsure how to register with HMRC or file a Self-Assessment tax return. 
• You want to maximise your tax efficiency and claim all allowable expenses. 
• You’re planning to grow and may switch to a limited company in the future. 
• You’re applying for a mortgage or loan and need professionally prepared accounts. 

You may not need support yet, if:

• Your finances are simple (e.g. one income stream, few expenses). 
• You’re confident using accounting software. 
• You have the time and interest to manage your own bookkeeping and tax returns. 

However, even if you don’t need an accountant right now, a one-off consultation with an adviser can still be valuable to discuss your current position and potential goals for the future.  

How can an accountant help your startup or small business grow?

Accountants do more than just file tax returns. They can be strategic partners in your business journey and help streamline your time to focus on what you do best. 

Core services:

• Bookkeeping and Payroll – Keeping your records accurate and up to date. 
• Tax planning – Helping you reduce your tax bill legally and efficiently. 
• Compliance – Ensuring you meet all deadlines and avoid penalties. 

Growth-focused services:

• Business advice – Helping you choose the right structure, pricing strategy or funding route. 
• Financial forecasting – Creating models to predict future income, expenses, and cash flow. 
• Investment readiness – Preparing financials for investors or banks. 
• Mergers and acquisitions – Supporting you through buying, selling or merging businesses. 
• IPO preparation – Guiding you through the complex process of going public. 

With the right accountant and adviser, you’re able to build a stronger, more resilient business with strong Corporate Governance. This is particularly important if you are presenting to potential and current investors. 

How to find an accountant for your startup or small business

Choosing the right accountant is crucial. Here are a few tips to help you find the right fit: 

• Look for experience in your industry – They’ll understand your challenges and opportunities. 
• Check qualifications – Look for chartered accountants (e.g. ICAEW, ACCA). 
• Ask about software – Make sure they’re familiar with the tools you use. 
• Consider their communication style – You want someone who explains things clearly and ultimately makes your life easier. 
• Read reviews or ask for referrals – A good reputation goes a long way. 

How Gerald Edelman can help

At Gerald Edelman, we specialise in supporting startups and small businesses. We have a proven track record of taking clients from infancy, all the way to exit.  

Even if you are ‘only’ aiming for a good lifestyle business – why not make that lifestyle as nice as possible? Whether you need help with compliance or strategic advice to scale, our team is here to help you succeed.