How to manage your books and hire an accountant

Chloe Bell
By Chloë Bell, Content Journalist

When you’re running a small business, you need to be aware of accounting basics to make smart financial decisions and see your business succeed. 

But if you’re new to the business world, you might not know where to start. Luckily the team at Bionic have put together a handy guide all about how to manage your books and hire an accountant if necessary. Read on for more. 

What is small business accounting?

Firstly, it helps to understand what small business accounting is. Accounting is  the process of identifying, recording, measuring, and interpreting financial information. By keeping an eye on your financial records, you can monitor any gains or losses during the financial year and adapt accordingly. 

A business accountant speaks to a business owner who is using laptop sitting in modern office near panoramic window.

What’s the difference between bookkeeping and accounting?

You might see the term ‘bookkeeping’ come up when you’re researching how to set up an accounting plan for your business. 

Bookkeeping is the first part of the accounting process. So, if you employed a bookkeeper and an accountant, their work would likely overlap in some capacity. Bookkeepers are in charge of recording and organising your financial data, whereas accountants decipher this data and present it to you. Both make it easier to make a solid financial plan. 

Bookkeepers take care of any daily financial tasks you might have. This covers everything from data entry, going through receipts, checking invoices, and paying suppliers. Bookkeepers can also produce reports and prepare your business for an accountant.

What are the accounting basics?

It can seem daunting to get a handle on your accounting, but there are a few basic steps to take before you get into the nitty-gritty of it. 

Some business owners choose to carry out accounting themselves, whereas others will hire a professional to take care of things. You should take the following steps no matter which path you choose:

1. Open a bank account

First things first, you need to make sure you have opened a bank account for your small business. After you’ve registered your business, you need to look into setting up a business bank account ASAP.  

You should ideally do this before you start attracting customers and taking payments.  Having a separate bank account from your personal one keeps your business transactions to one side and can help keep track of your financial figures for tax and accounting purposes. 

Find out more about how to choose and set up a business bank account with our handy guide. 

2. Track your business expenses

When you’ve successfully set up your bank account, you need to start as you mean to go on, in an organised manner. You must start tracking your payments and transactions for an effective financial strategy.

You want to be accurately keeping tabs on your expenses, income, outgoings and overheads and noting them down for reference. Try to ensure you have a solid financial plan from the start and keep track of the following expenses:

Food and entertainment For example, if you carried out a business meeting in a café, make sure you have documented it. Keep the receipt and a note of who attended.

Business travel If you need to travel for work, make sure you keep any receipts. These can prove you’re not just taking a holiday and you will be able to claim some activities as expenses, e.g. client dinners. 

Home office receipts It’s also important to calculate what percentage of your home is regularly used as an office space, you may be able to claim this percentage back as an expense.

Transport expenses — Try to record whenever you use your own car for work purposes or whenever you use public transport (such as trains and buses) to meet clients or travel somewhere for the benefit of your business. Keep note of your petrol usage, number of miles driven, and parking costs. 

3. Develop a bookkeeping system

The key to an organised business is developing a good bookkeeping system and following it. It’s important to think about what style of system might suit your business best. 

For example, you might choose to do your figures yourself via a popular software platform like QuickBooks, Wave or Excel.  Alternatively, you have the option of using a professional bookkeeper who is either local or online based. The third option is to employ your own dedicated on-site bookkeeper, but this is usually a path for bigger businesses.

4. Set up a payroll system

Next, you need to set up an effective payroll system to pay your staff, including any freelance accountants or bookkeepers you employ. For employees, you’ll have to set up a regular, fair schedule so they are being paid at the same time each week or month. You’ll also need to ensure you are setting aside the right taxes for them, e.g. National Insurance and pension. Lots of online software can help with this side of things, or alternatively an accountant should you wish to employ one.   

Find out more about how to set up and manage payroll for the first time with our guide. 

5. Determine what tax you have to pay 

The next big step is to determine what tax you need to pay as a business. The main categories are below:

Self Assessment

Self-assessment is a well-known system that Her Majesty Revenue and Customs (HMRC) uses to collect income tax. If you’re a sole trader, you’ll need to register with HMRC to file your taxes. 

Corporation tax

Corporation tax applies if you are:

  • A limited company
  • A foreign company with a UK branch or office
  • A club or association (like a community group or sports club)

If you are an owner of any of the above, then you are responsible for calculating and reporting your corporation tax. It’s important that you keep on top of it.


Value Added Tax (VAT) is a tax charged on goods and services in the UK. VAT is collected on behalf of HMRC by registered businesses. When you register for VAT, you have to charge the tax rate on anything you sell.

How often should I update my accounts?

It really depends on your individual business. Some business owners do their bookkeeping every day. Others do it at the end of each week. As long as you keep check of your figures on a regular basis, you should be set up for an effective plan. A good rule of thumb is to make sure you are, at the very least, recording data on a monthly basis to keep on track.

What should I look for when buying accounting software?

Not every business owner is comfortable with using business software. But it can be useful when inputting data and can also save you valuable time. If you choose to do your books yourself, getting the right software can be invaluable. When sourcing software for your business, you should look at:

  • Platform integrations  You want your accounting software to integrate with your business website and any other platforms you use. 
  • Reporting You ideally want accounting software that provides in-depth reports so you can see how your business is performing quickly and easily.
  • Tax configuration  It can be helpful to look for accounting software that makes working out tax simple and less of a hassle.
  • A support network  Support is vital, so try to look for a platform that offers live chats and a 24-hour helpdesk. If you run into any problems, then someone will always be on hand to help.

When do you need to hire an accountant?

Some business owners choose to do their bookkeeping themselves. But, if you would rather hire an accountant to take care of that side of things for you, then that is totally fine too. 

Many businesses start off accounting themselves but discover they need help when they get audited, apply for a loan, if business becomes too stressful or if the company is growing quickly.

How to hire an accountant 

If you ultimately decide you do want to hire an accountant, you need to do your research and follow a few key steps to ensure you’re matching with the right professional. 

1. Identify your needs

First, you need to identify what level of financial help you need. Review your records and cash flow and assess what you require from your potential accountant. 

There are a few questions you can ask yourself; Have you been keeping on top of your books and just need someone to take over? Or do you need someone to overhaul your whole process and essentially start from the beginning? Consider what you are asking them to do and how complex your business finances are and then proceed from there. 

2. Determine if you need full-time or part-time accounting

After you’ve identified what kind of help you need from your accountant, you’ll probably know if you need full-time or part-time help.

Money can be a factor here, so you’ll need to work out if your business has the funds to take on a full-time accountant and decide whether it will be long or short-term. 

Think about if you have ongoing issues or if you just need some extra help at a certain point in time. For example, if you’re getting ready for the new tax year and just need someone to cast an eye over your books, then you would probably only need to employ a freelance accountant for a few months. 

3. Prepare interview questions

Next, think of some good interview questions to ask your new potential accountant. You want to hear about their experiences, where they have worked before, their qualifications and how they approach problems. Set up an interview with the candidates you think will match your business the best and see who wows you.

4. Onboard your accountant

Once you have interviewed and chosen your new accountant, it’s important to onboard them onto your team. Even if they are going to be working remotely or freelancing on a part-time basis, you want to ensure they feel welcome, and know their role and what is expected of them. Schedule regular check-ins with them to see how they’re coping and be on hand to offer any additional information they may need to know about your business finances. 

How can Bionic help your business?

Getting a handle on your accounting can be tough. You may feel that you don’t have time to be worrying about hiring a bookkeeper as a busy small company owner. But Bionic can help you manage all your other business worries so you can focus on what matters, running your SME.

The tech-enabled team at Bionic can help you save time, hassle, and unnecessary admin when it comes to sorting your business essentials. We compare business gas and business electricity, as well as business phone and broadband to help make sure you're on the best deals. We can also help with business insurance and business finance. Get in touch to find out more.