A lot of freelancers may not think they need an accountant, that it’s something only big businesses need. However, any business no matter how big or small could benefit from an accountant to handle their tax and bookkeeping affairs.
On the other hand you may already know you need an accountant but are wondering when you should hire one. When you work on your own it might be harder to gauge when you need extra help because you’re so used to doing everything yourself.
So when do you make the move from doing it yourself to hiring an accountant? Here are our tips:
When you’re financially stable
There’s not a lot of stability in the freelancing world but one of your main aims at the start is to try and get to a place where your income is consistent enough that you can start to invest in your business.
Hiring an accountant too soon could be an unnecessary drain on your finances when you’re just starting out. On the other hand leaving it too late might cause more pressure for yourself as you get busier. The busier you get the more likely you could be to make a mistake in your accounts which could end up being costly.
When you’re busy
One sign that you should start outsourcing is that you’re feeling overworked. If you’ve already tried to make your process more efficient but are still overworked, then it’s well worth outsourcing some tasks that take up a lot of your time, particularly the ones you don’t get paid for like admin or accounting.
With an accountant taking over your accounting and bookkeeping duties, this frees you up to spend more time on your business and on paid client work.
When you’re making mistakes
Unfortunately, mistakes do happen but with accounting your mistakes can be costly as you can be fined for anything from missing the Self Assessment deadline to falsely claiming for expenses or forgetting to declare income.
If you’re struggling with Self Assessment, you wouldn’t be alone. With Making Tax Digital (MTD) coming into place by 2019, you’re also going to have to start doing your tax returns on a quarterly basis as opposed to annually. So if once a year is already bad enough, then you’re probably going to benefit from some help from an accountant who can help and advise you throughout the year.