An accountant for a small business does six broad things: reviews and organises your financial records, prepares your accounts, works out and files your tax returns, oversees payroll and VAT where you have them, keeps you ahead of filing deadlines, and advises you on decisions using real figures. Not every business needs all six, and the balance shifts with your structure and stage. This guide walks through each one so you know what to expect, and what to ask for.
Reviewing and organising the records
Everything an accountant produces is built on your records: sales invoices, purchase bills, bank statements, receipts and payroll data. GOV.UK sets out what you must keep and for how long, and the rules differ between the self-employed and companies.
An accountant’s first job is to check those records are complete and coherent. That means confirming the bank reconciles, questioning transactions that look out of place, and chasing gaps before they become errors in the accounts. Some businesses hand over bookkeeping entirely; others do it themselves and have the accountant review it. The split matters less than the result. The difference between the two roles is covered in our guide to bookkeepers versus accountants.
Preparing the accounts
From clean records the accountant prepares accounts. For a limited company these are statutory annual accounts filed with Companies House and used for the Company Tax Return. For a sole trader they are the figures behind the Self Assessment return. Either way, the accounts convert a year of transactions into a structured picture: what you earned, what you spent, what you own and what you owe.
Many accountants also prepare management accounts during the year: shorter, more frequent reports for your own decision-making rather than for filing. The two are different documents with different purposes, explained in annual accounts and management accounts.
Calculating and filing tax
Tax work is the part most owners think of first. Depending on your structure, an accountant will:
- Prepare and file Self Assessment returns for sole traders, partners and directors
- Prepare the Company Tax Return and calculate Corporation Tax for a company
- Identify allowable expenses and reliefs you are entitled to claim
- Check the figures against the records so the return matches reality
Current deadlines and thresholds are on GOV.UK. A good accountant does not just fill in forms; they check the position makes sense before anything is submitted, and they can deal with HMRC on your behalf if questions arise.
Overseeing payroll and VAT
If you employ people (including paying yourself through a company), someone has to run payroll: calculating pay and deductions, reporting to HMRC each pay period, and handling workplace pension duties. If you are VAT registered, returns must be prepared from digital records and filed on time. Accountants either run these processes for you or review what you run yourself. Both are areas where small, repeated errors compound, which is why oversight is worth having even if you do the routine work in-house.
Tracking deadlines
Small business tax has several separate calendars: accounts filing, Corporation Tax, Self Assessment, VAT periods, payroll reporting and confirmation statements for companies. Missing one usually costs money and always costs attention. An accountant maintains the list, tells you what is due and when, and asks for information early enough to file without a scramble. Our year-end checklist shows what that preparation looks like in practice.
Advising on decisions
The compliance work above is the floor, not the ceiling. The more useful half of the role is advice: whether to operate as a sole trader or a company, how to price, when a purchase makes sense, what your cash position allows, and how to prepare for growth or funding. Because the accountant already knows your numbers, the advice is specific rather than generic. If your accountant only appears once a year with a bill, you are getting the floor.
What this looks like across the year
A typical rhythm for a small business:
- Monthly or quarterly: bookkeeping review, VAT returns, payroll, management figures if you take them
- Before year end: a planning conversation while decisions can still affect the year
- After year end: accounts preparation, tax calculations, filing
- As things come up: questions, HMRC letters, decisions worth a second opinion
Frequently asked questions
Does a small business legally need an accountant?
No. You can keep your own records and file your own returns. Most owners use an accountant because the time saved, errors avoided and reliefs identified outweigh the fee, and because the responsibility for getting it right stays with you either way.
What should an accountant do for my business each month?
That depends on what you have agreed. A monthly service usually covers bookkeeping or bookkeeping review, payroll and VAT where relevant, and access for questions. An annual-only service covers accounts and tax returns. Check your engagement letter; it lists exactly what is included.
What information will an accountant ask me for?
Bank statements, sales and purchase records, payroll data and explanations for anything unusual. We list it all in what information an accountant needs.
Does the role differ by business structure?
Yes. Companies bring statutory accounts, Corporation Tax and director responsibilities; sole traders centre on Self Assessment. See the structure-specific guides below.
Can an accountant deal with HMRC for me?
Yes. Once authorised as your agent, an accountant can speak to HMRC about your affairs, file on your behalf and respond to correspondence, including during an enquiry.
The full series
This guide is the overview. Each part of the role has its own detailed guide:
What accountants do, by task: What information an accountant needs · Annual accounts vs management accounts · Tax planning and tax avoidance · The accountant’s role at year end
How an accountant helps with specific problems: Cash flow · Business plans · HMRC enquiries · Company formation · Payroll · VAT · Business growth
By business type: Limited companies · Sole traders · Startups
How we can help
Our small business accountancy service covers the whole role described here, scoped to what your business actually needs. Request a quote and we will set out exactly what we would do for you.