Accounting for Small Businesses

small business accountants in london

What is Small Business Accounting?

Accounting for Small Businesses is the process of keeping track of all the money coming into and going out of a small business. It involves maintaining track of each dollar that is earned from sales and used for expenses like supplies, wages, and rent. You identify these transactions to find out where your money is going and coming from. Regularly cross-referencing your information with bank statements ensures accuracy. These data may be used to create financial statements illustrating your company’s financial situation. Accounting also helps with tax management, future planning, and budgeting. It is hard to maintain financial and organizational control over your company.

Why do Businesses Use Accountants?

Accountants bring financial clarity to businesses. Accountants handle money coming into and leaving a company. To showcase the financial health of the company, they arrange financial data, including sales and costs. In addition, accountants draft crucial records such as financial statements and tax filings, which aid companies in comprehending their earnings, liabilities, and general financial situation. They provide insightful guidance on budgeting, saving money, and future planning. Accountants utilize their knowledge to make sure that companies pay the correct taxes and adhere to financial regulations. In the end, accountants help companies to make wise choices, avoid problems, and expand profitably.

When we talk about paying for the service of a professional accountant to look after the accounting and financial matters of a business, there are common accounting misconceptions for Small Businesses in London that owners fall victim to.

Some common myths about hiring an accountancy firm and their explanation are presented below.

Myth 1: Accountants are not for Smaller Businesses

Common man’s thinking is that only a large-scale business should have a professional accountant because they charge huge fees. This might be correct if you plan to hire Big 4 firms for an off-license shop, but a large number of equally qualified and experienced accountants are available nowadays who charge unbelievably low fees. This is because some of them can minimize costs by working from home, some have a market penetration strategy with low fees, etc. So, even if your business is a small shop or a multi-million-pound company, matching levels of accountants are always there. You can try this by searching in Google for a minute, you will find accountants for your company starting from prices as low as £50 a month (depending upon your volume and size of business)

Myth 2: Accountants’ costs far outweigh the benefits

The normal belief of the small business owner is that accountants add little value to the company while charging higher fees, so it’s simply not worth hiring them. But the businessmen never account for the fines, penalties, mental stress, and all other administrative and compliance hassle that they have to deal with on a daily basis with Companies House, HMRC, and other regulatory bodies. Accountants can eliminate those hassles completely and save you costs as well as leave you free from routine work to expand your business.

Myth 3: Accounting is just record keeping which I can do myself

A rather dangerous myth is the overconfidence of small business owners to underestimate the accountancy profession as a whole. They think they are as good as professional accountants because accounting is nothing more than proper recording of invoices, keeping track of transactions, etc. They might not even realize this is not true until they get a penalty notice for missing a compliance, or investigation notice for errors in return and many other complications. Ultimately, they have to hire the service of a professional to sort out those issues and additional costs of course. So, the earlier they get rid of this myth, the better it is for the business and themselves.

What does an accountant do for a small business?

An accountant is essential to small businesses in various ways.

  • Bookkeeping: Accountants keep records of financial transactions such as sales, purchases, costs, and payments.
  • Financial Analysis: Accountants make sure that the company is successful by understanding financial situations and helping them in making wise decisions.
  • Compliance with Taxes: Accountants assist small businesses and companies in paying taxes. Keeping an eye on tax rules and regulations, they assist in minimizing tax liabilities, preparing and submitting tax forms, and locating tax deductions and credits.
  • Budgeting: Small businesses benefit from accountants because they help in creating budgets and projections by using market trends and financial data.
  • Audit Support: Accountants help small firms by organizing financial records, compiling paperwork, and representing them throughout the audit process when they are being audited by tax authorities or financial institutions.

Small Business Accounting Tips

  • Maintain a clear division between your personal and business finances. Save yourself some time and hassle in the future by separating your bank accounts.
  • Ensure your records are organized and error-free. You’ll be glad when the tax deadlines start getting closer.
  • Talking about taxes make sure to adhere to tax deadlines consistently.
  • Retain all receipts for tax purposes. Keep any business-related receipts that you may claim for business expenses.
  • Attend free HMRC workshops. Look for workshops happening in your area or check out their e-learning tutorials.
  • Plan your finances to include taxes. Set some amount of your income aside to easily pay off your taxes.
  • Familiarize yourself with tax regulations.
  • Create profit and loss statements regularly.
  • Make a use of digital app for financial management. There are plenty of bookkeeping and accounting apps that can help your entire process be more effective and efficient.

Small Business Accounting Services that GNS Provides

GNS accountancy services are comparatively low in comparison providing cheap cost accountants for small businesses in London. We provide a whole range of accountancy services normally provided by an accountancy firm.

You may also like: 7 Reasons Why You Should Switch to Online Accounting Services

Frequently Asked Questions

How can accountants help small businesses?

Being a small business if you lack experience in managing the financials of a business, you will want to hire an accountant. They can help you set up a business plan, structure, tax payments, financial reports, and create a realistic ideal budget for your business.

Do small businesses need an accountant?

You should hire an accountant, if your small business is expanding, dealing with intricate financial operations, or having tax issues. They help with tax planning, guarantee regulatory compliance, offer insightful information about financial performance, and free up time for essential business operations. Their knowledge reduces risks and promotes development and stability in the financial system.

When to hire an accountant for a small business?

There is no specific time to hire an accountant. But if you lack financial managing skills or feel the pressure of keeping records and preparing for taxes that could be a sign. You may need to hire an accountant to keep your financial duties stress and hassle-free.

Do I need an accountant for my small business?

It completely depends on your situation, but having an accountant is more than just filing taxes and handling paperwork. They will analyze your financial data too which can show you ways to make your business more profitable.

How to find a good accountant for a small business?

London is an ever-growing and busy city filled with numerous accountants. GNS Chartered Accountants is known for its affordable and trustworthy service. Contact GNS Chartered Accountant for services such as tax preparation, audit support, and financial advisory solutions.

For expert advice and professional tax services, arrange a consultation today. Call us at 0208 090 2604, email us at, or reach out to us on our Facebook.

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