Finding the right accountant: a guide for London SMEs

London's small business scene is nothing if not dynamic – independent shops on side streets, pop-ups in railway arches, digital agencies in coworking spaces.

If you're at the point where you're steering an established business through its next phase, managing the financial side of things can feel like a full-time job.

While some business owners thrive doing it themselves, others reach a point where bringing in an accountant isn't just helpful – it's a smart move.

The challenge is knowing when that moment comes, and how to find someone who actually gets your business.

This short guide takes you through what to look for, what to ask and how to make a choice that supports your business without breaking the bank.

Do I really need an accountant?

Let's start here, because the answer isn't always "yes". Many small business owners manage their own finances quite successfully, especially in the early days.

Cloud-based accounting software like Xero or QuickBooks has made it easier than ever to handle bookkeeping, invoicing and even tax returns yourself.

But that doesn't mean going solo is always the best route. An accountant can save you time, keep you on the right side of HMRC and spot financial risks (or opportunities) you might otherwise miss.

Here are a few signs you might be ready for professional support:

• Your finances are becoming more complex than a spreadsheet can handle.

• You're approaching tax deadlines and want to avoid penalties.

• You're growing – hiring, expanding or taking on investment.

• You want to better understand your cash flow or profitability.

You don't have to wait until things get stressful. Sometimes, having an accountant involved early on can help you avoid issues before they start.

What kind of accountant do I need?

The type of accountant that suits your business depends on what stage you're at, how much support you need and how hands-on you want them to be. You might consider one of the following:

• Freelance accountants: often more flexible and cost-effective for sole traders or micro businesses. Many are small business owners themselves and can relate to the challenges you face.

• Accountancy firms: these range from small local practices to larger, more corporate-style firms. A smaller firm might give you more personal attention; a larger one might offer broader services under one roof.

• In-house accountants: typically only necessary for businesses with more complex operations. Hiring in-house is a big step and usually comes later in a business' journey.

If you're passionate about supporting local businesses, consider working with a fellow London-based SME.

They're more likely to understand the local business landscape – and you'll be supporting someone else's enterprise in the process.

Qualifications matter: what to look for

Anyone can call themselves an "accountant" in the UK, which makes checking credentials important. Look out for these key certifications:

• ACCA (Association of Chartered Certified Accountants)

• ICAEW (Institute of Chartered Accountants in England and Wales)

• CIMA (Chartered Institute of Management Accountants)

These professional bodies require ongoing training, follow strict ethical standards and make sure their members are up to date with UK regulations.

A certified accountant also gives you peace of mind that they're qualified to handle everything from tax advice to preparing statutory accounts.

What will it cost?

Accountants charge in different ways. Some offer fixed monthly packages, others bill hourly and some charge per service (like filing a tax return or preparing annual accounts).

Here's a rough idea of what to expect (these are estimates so you could end up paying more):

• Basic bookkeeping: from £25 to £50 per hour.

• Tax return filing (sole trader): around £150 to £300.

• Limited company accounts and tax return: £750 to £2,000 per year depending on complexity.

Don't be afraid to ask for a breakdown of what's included. A cheaper monthly fee might not cover everything you need, so it's worth comparing what each accountant offers rather than just looking at headline prices.

What services do they offer?

Before you hire anyone, be clear on the kind of support you're after. Services vary, but most accountants offer some combination of:

• Bookkeeping – day-to-day tracking of income and expenses.

• Payroll – if you're paying staff.

• VAT returns.

• Self Assessment or company tax returns.

• Preparing annual accounts.

• Financial forecasting and planning.

• Business advice – especially useful when you're growing.

Some offer one-off services, while others work with clients on an ongoing basis. Think about whether you want someone you can call for occasional advice, or a partner who's more hands-on throughout the year.

Are accountants a good fit for small businesses?

A great accountant for a multinational corporation won't necessarily be a great fit for your Camden café or fitness studio in Hackney. Ask whether they have experience working with businesses of your size and type.

You'll also want someone familiar with London's business environment. For instance, they might have experience with local council grants, understand London's property-related tax quirks or have worked with others in your niche.

Here are some helpful questions to ask during your search:

• Have you worked with businesses like mine before?

• Are you familiar with HMRC regulations for [insert your sector]?

• What cloud accounting platforms do you use or recommend?

• How do you communicate – phone, email, video calls? Do you have an online client portal?

• What's your turnaround time for questions or requests?

Choosing someone local makes in-person meetings easier (if that's your preference) and can help build a stronger working relationship.

Embracing cloud accounting tools

Modern accountancy is more than paper receipts and spreadsheets. Most accountants now use cloud-based tools, which let you:

• Access your financial data in real time.

• Send invoices and track payments easily.

• Snap photos of receipts from your phone.

• Keep everything safely stored and backed up.

If you're not already using something like Xero, FreeAgent or QuickBooks, an accountant can help get you set up.

These tools also make collaboration smoother, since both you and your accountant can log in and see the same up-to-date figures.

Final thoughts

Hiring an accountant is a business relationship. The right person can help you make better decisions, stay compliant and free up time to focus on what you do best. But don't rush it.

Speak to a few people. Ask questions. Look for someone who explains things clearly, listens well and shows a genuine interest in your business.

Whether you're in your first year or five years in, it's never too early (or too late) to build good financial foundations.

Tip: Ask for a free initial consultation – many accountants offer one and it's a great opportunity to see if there's a good fit without any commitment.

Support available on Grow London Local

If you're looking for free support that complements the ideas in this guide, the Grow London Local platform has a growing list of practical offers tailored to London-based founders like you:

• Accountancy services (Westridge Accountants)

• Bookkeeping, accounting and tax services (ABF Accounting Services)

• Accountants and tax advisers (EliteEdge Accountants)

• Expert accounting and bookkeeping services for SMEs (Keirstone Limited)

• Strategic tax advisory and accounting (Oasis Accountants)

• Cloud accounting software (Xero)

• Accounting and tax services (Co-Accounting Ltd)

• Accountants and business advisers (Newinton Accountancy)

• Chartered accountants (PB Partners LLP)

Read more

• Accounting for small businesses in London

• Financial housekeeping: three tips for the end of the tax year

• How to pay Self Assessment tax

Grow London Local: Support for London's small businesses

No matter where you're based in London, you'll find relevant support and guidance on business planning, sales and marketing and much more, as well as opportunities to connect with like-minded business owners. Visit Grow London Local now