Accounting services for freelancers

Keeping up with client deadlines and winning new freelance projects is demanding work, so it’s not surprising that the admin can feel overwhelming. Sadly, there’s no way around how important it is to have good bookkeeping records. Up-to-date bookkeeping is essential to help your business run smoothly and it makes tax returns much easier too.

Managing your own accounts can be time-consuming – and honestly, really stressful if you’re not sure what you’re doing! Using the services of a reliable accountant or bookkeeper can be a good way to take the pressure off.

 

What should a freelancer look for in an accountant?

Any good accountant will be able to offer you some level of support, but finding one who has experience working with freelancers will be useful. Whether you’re a sole trader or registered as a limited company, working as a freelancer is very different to working as a larger business, especially one with lots of employees. These differences tend to be reflected in the accounts.

It’s also worth considering whether you need an accountant who specialises in your particular industry. Contractors who work in the construction industry are an excellent example of this.

Not only are contractors subject to the confusing world of IR35, there are also tax considerations involving the Construction Industry Scheme. Neither are particularly straightforward, so it’s well worth looking for an accountant who has experience in your area.

 

Can I use an online service?

Using an online accountant means you’re not restricted to the local area, giving you more choice, and at a more competitive price. A Freelancer based in Central London could use an online accountant in Manchester, avoiding the eye-watering London rates.

 

Do I need an accountant or a bookkeeper?

To answer this properly, it’s useful to understand what the difference is between accountants and bookkeepers.

  • Bookkeepers: Literally keep the books! It’s their job to record transactions correctly, create reports on your data, and generally keep your freelance finances up-to-date.
  • Accountants: Use the bookkeeping data to prepare accounts and tax returns, help you be more tax-efficient, and see where you could save money.

Lots of accounting services include bookkeeping support, or you can use bookkeeping software to maintain your own records.

Finding an accountant for your freelance business

Choosing the right accountant is a bit like shopping for the right pair of shoes. Any pair might get you from A to B, but the right pair is a far less painful experience.

We’ve already touched on the subject of looking for someone who has experience in your type of business, so our list of points looks at what else you might consider on your hunt.

Will you want to see them in person?

Freelancing is typically pretty flexible, so the idea of working online with clients that you never actually meet in person is probably nothing new. It’s a concept which has rolled out in to the world of accounting, with online practises offering the same excellent level of services, but without the high-street business-rates price tag. You might not always need a local accountant.

What services will you need from them?

You might not need every service your accountant offers, so if they’re all bundled together in one package, see if there’s any room for discounts. It will help you bring down the cost, such as leaving out payroll services if you don’t have any employees and you’re not a director, for example.

Cheapest isn’t necessarily cheap in the long run

Back to the shoes analogy here! Just like it’s better to buy one decent pair of shoes than multiple pairs which fall apart faster, it’s better to pay for your accounts to be done properly.

Really cheap isn’t always the best road to take in the long term as it often also means you incur costs further down the line with ‘additional services.’ Shop around, and compare quotes for accountancy fees before committing to anything.

Will have direct access to your accountant, or will be allocated an account manager. Ideally, you should be looking for direct contact.

Find out what accounting software they use

Most use specialist accounts software, but more and more also provide simple bookkeeping software which their clients can use. It can help you save quite a bit of money, and can making working together on real-time data easier too. Double bonus points if it’s MTD-friendly!

Do they limit the amount of support?

This is basically about checking what the fee includes. If your accountant charges a flat fee for the service, but then bills you each time you pick up the phone, any questions or issues can quickly become rather expensive! Some practises offer unlimited access to your accountant throughout the year, which is pretty useful.