How Much Does a Small Business Accountant Cost in the UK?

Limited knowledge and skills in accounting can lead to costly mistakes. So instead of managing your finances by yourself, you’ll be better off with the help of a certified accountant. Its initial value may make you think twice until you see the amount of time and money you can save. How much does a small business accountant cost? Is it necessary to hire in-house staff or are there alternative ways to avail the service of an accountant at a more affordable rate?

How Much Does a Small Business Accountant Cost?

The cost of hiring an accountant depends on several factors such as the skills, experience, and tasks needed to complete the job. The location of your business and the current economic climate also matters.

According to the latest data, the costs of small business accountant in the UK are as follows:

Accountant

• Market range: £20k-£47k (The median pay is £28k)
• Educational attainment: Bachelor’s degree in Accounting
• Certification: Certified Public Accountant
• Experience: 3 years
• Basic skills: Payroll administration, bookkeeping, tax preparation

Bookkeeper

• Market range: £18k-£32k (The median pay is £24k)
• Educational attainment: Bachelor’s degree in Accounting
• Certification: Certified Bookkeeper
• Experience: 3 years
• Basic skills: Bookkeeping, payroll administration, financial reporting

A bookkeeper has a lower wage compared to an accountant because the role does not involve any formal training. If you’re only dealing with basic accounting tasks, hiring a bookkeeper is the more ideal option.

On the other hand, it is best to hire an accountant if you’re dealing with higher-level accounting tasks like tax preparation, compliance, and financial planning and analysis.

Note: The figures stated herein are based on the calculations made using PayScale. To keep the numbers as close to actual compensations as possible, we used constant variables in areas like the years of experience at work, location, educational attainment, and the number of staff in a team. The market range includes the salary, bonuses, and other factors affecting compensation. Compensation may still vary or change per location or economic condition. To get updated information, you can also use the said software or ask around other businesses in your area with in-house accountants.

Do Small Businesses Need an Accountant?

Your accounting responsibilities grow alongside your business. When it happens, you’ll need to allocate a huge portion of your time on cash flow management, tax preparation, payroll, compliance, and other accounting duties. But how do you know if it’s time for you to hire an accountant?

To find out, try to answer these questions:

• Do you have enough knowledge and experience in performing accounting duties? 
• Do you have time to do this, apart from other business activities you have to oversee?
• Are you familiar with the necessary accounting regulations you need to follow?
• What are the long-term effects of doing the accounting by yourself?
• Can you afford an accountant?
• If there are more affordable ways to avail the service of an accountant, will you consider getting one?

DIY accounting is fine, as long as you have enough time to spare. It’s also easy if you don’t have complex tax requirements. But if you’re lacking in both time and expertise, it’s better to let an accountant do the job for you. Hiring an accountant will not only reduce your workload but can also help you improve your cash flow.

In-House, Freelance, or Outsourced Accountant?

Financially speaking, your decision matters when deciding whether to hire an in-house, freelance, or outsourced accountant. Each has its benefits and downsides, so you need to take extra consideration before making a decision.

In-house accountants have the proximity advantage. However, as mentioned earlier, the salary of an in-house accountant is pretty high. If budget is a concern, then hiring a freelance or an outsourced accountant is your next option.

A freelance accountant is someone who works for different clients. Typically, you can find them in freelancing platforms like Upwork. You can find anyone who provides the service you’re looking for. Their service fee is also cheaper compared to in-house accountants. However, service quality and turnaround time can sometimes be an issue because in most cases, you’re not their only client.

An outsourced accountant, meanwhile, can also commit to the same accounting duties provided by an in-house accountant while maintaining service quality and integrity. Accounting solutions specifically offered for small businesses are also more affordable compared to hiring an in-house staff.

Choosing to outsource also guarantees you a service-level agreement. Before you sign a contract, you have to agree first with the terms such as the availability of the accountant, accounting duties, turnaround time, cost, business continuity plans, IT capabilities, and other factors that would affect the service you’ll receive.

Even without the proximity advantage, you can still have confidence in the service you’ll receive because the accountant who’ll work with you is under the direct supervision of a senior director. Communication lines are always open so you can get in touch with your accountant anytime. Just make sure to choose a reliable outsourcing company to ensure your accounting tasks are properly attended to.

Accounting Services You Can Afford

More than anything, developing your business requires your undivided attention. If your accounting duties are taking much of your time from your core activities, maybe it’s time to get some help. Save more by outsourcing this function rather than hiring an in-house accountant. Talk with our financial experts now to learn which of our customized accounting services fits your requirements. Discover how you can succeed with outsourcing by getting a free copy of our guide Outsourcing: How to Make it Work.