Delaying Accountant Services for Your New Ltd Company: What You Need to Know
Hello Entrepreneurs,
If you’re gearing up to launch a limited company to sell products on Amazon, you’re not alone in navigating the initial steps. A common question that arises during this process is whether you can postpone hiring an accountant after establishing your company, especially when your income stream won’t start immediately.
Setting the Stage
Launching a limited company offers access to certain exclusive business features on Amazon. However, it can also usher in financial obligations before your revenue begins to flow. You’re right to consider the costs, especially if your business is still in its embryonic stage with only a few outgoing expenses on the horizon.
Key Considerations
The good news is, you do have some flexibility here. When forming a limited company, engaging an accountant is not an immediate necessity. In fact, many choose to defer these services until there’s financial activity to justify the expense.
Most business owners set up their company well in advance of beginning their sales to ensure smooth operational setup. During these initial months, your primary financial responsibilities will likely be minimal, involving mainly setup costs rather than income-related tasks.
When to Bring in the Experts
Given that your significant financial activities, like VAT returns, won’t be occurring in the initial months, you can reasonably delay hiring an accountant until you’re closer to generating revenue. Typically, it’s advisable to enlist an accountant before you start submitting financial statements or VAT returns, ensuring your records are correctly managed from the outset.
In summary, establishing your limited company without immediately hiring an accountant is a feasible option, provided you remain compliant with any initial legal obligations. This strategy can help manage costs until your business gears up and starts receiving income. Once your business wheels are in motion, partnering with a professional accountant will ensure you’re handling finances correctly and maximizing your business potential.
Stay savvy, and best of luck on your entrepreneurial journey!
1 Comment
bdadmin
Hi there,
Congratulations on taking the step to start your own Ltd company on Amazon! Navigating the early stages of business setup is a balancing act, especially when it comes to managing costs effectively. Your question about when to bring an accountant on board is a common concern for new business owners.
It’s certainly possible to delay appointing an accountant for a limited time after setting up your Ltd company, especially since you’re not expecting revenue for the first few months. Here are a few critical points to consider:
Initial Setup and Compliance: When you initially set up your Ltd company, there are specific compliance tasks you need to complete, such as your incorporation with Companies House and registration for corporation tax with HMRC. While you can handle these tasks independently, an accountant can ensure they are done correctly and efficiently, preventing potential issues down the line. If you’re comfortable with these tasks, delaying an accountant for a few months might be feasible.
Record Keeping: Even before revenue starts flowing, it’s important to maintain accurate and detailed records of any expenses or capital put into the business. This includes startup costs and any personal funds you’ve used. Good bookkeeping practices from the very beginning will save you time and possibly money when you eventually compile and analyze financial statements.
VAT Registration: Depending on your expected turnover, you might need to register for VAT even before you start receiving income. The threshold for mandatory VAT registration is £85,000 in the UK. However, voluntary registration might be beneficial in some cases, such as if your suppliers are VAT registered, allowing you to reclaim VAT on purchases. An accountant can provide valuable guidance here, but again, if you do your research, you can potentially manage this aspect yourself initially.
Timing for Appointing an Accountant: An optimal time to engage an accountant could be shortly before you expect to hit any mandatory deadlines. Before your first year-end accounts are due, and certainly before any VAT return is required, it would be wise to bring an accountant into the picture. This is often when an accountant’s support proves its worth, ensuring your submissions are accurate and timely, helping to avoid fines or penalties.
Cost vs. Value: Consider the value an accountant can provide beyond just compliance. Their insights might help you with cash flow management, claiming allowable expenses, and tax planning, potentially saving you more than their fee in the long run.
In summary, while it is possible and potentially prudent to delay