When should a limited company outsource their accounting?

When should a limited company outsource their accounting?

As a business owner, managing your accounts can be manageable in the early days. But as your business grows, it can become a much more onerous task, especially if you become a limited company with the added responsibility that entails.

Many limited companies outsource to an external accounting firm as it gives them access to a high level of accounting expertise at an affordable cost. Outsourced accounting services are flexible, and can include tasks such as bookkeeping, payroll, VAT, tax, and other accounting tasks.

If you are on the fence about outsourced accounting or wondering just what an outsourced accountant can do for you, then read on for our helpful guide.

If you are an owner-manager of a limited company looking to outsource accounting, then get in touch with Spotlight Accounting. We are a team of proactive chartered accountants based in Shropshire, specialising in accountancy for small businesses.

What accounting services does a limited company need?

An outsourced accounting service provider can take on some or all of your accounting tasks, depending on the size of your business and its needs.

Typical outsourced accounting tasks include:


Timely bookkeeping is the backbone of a good accounting system and without it, finances can quickly get out of control. Outsourcing bookkeeping to a professional accountant will ensure your figures are watertight and there are no nasty surprises come year-end.

Great technological advances in recent years have made unwieldy spreadsheets a thing of the past. Cloud accounting software is the new norm for bookkeeping and is efficient, flexible and accurate.

Spotlight Accounting recommends using the market-leading cloud software, Xero, which will ensure you are ready for Making Tax Digital.

Tax planning

Tax returns can be the bain of your life when you are trying to manage a small business. Many businesses choose to outsource their annual returns to an accountant, along with their bookkeeping.

That way, they can rest assured that they remain compliant with their obligations and won’t be hit with any penalties.

An outsourced accounting firm will help you plan for your annual tax bill and be proactive in finding efficiencies. They will help you to identify allowable expenses and highlight any tax reliefs your business may be entitled to.

VAT returns

Value Added Tax (VAT) is a notoriously complex subject that requires a good deal of knowledge and understanding.

Rather than wrangling with the details themselves, many businesses rely on the assistance of an accountant to take on the number-crunching and liaise with HMRC.

If your business is close to the threshold for VAT, an accountant can advise on the best VAT scheme and assist with the registration.

Financial reporting

Management accounting provides a regular and timely snapshot of your finances, be that weekly, monthly, or quarterly.

It includes important aspects of your company’s financial movements, such as cash flow, to enable strategic thinking and is key for driving business development.


Payroll is perhaps one of the most crucial but time-consuming tasks of the month for small businesses. Understanding PAYE and NI contributions is hard enough, but the admin around it can amount to a full-time job for a growing business.

That’s why many choose to outsource payroll to a trusted service provider.

What sized business needs outsourced accounting?

Any size of business can benefit from an accounting partner to help them take control of their finances.The types of accounting services you need may change as your business grows, but a good accountant can adapt their services to meet your needs at every step of the way.

As a self-employed sole trader, accounting tasks can be managed easily enough in the early days. But that’s not to say that accountants can’t add value to your fledgling business. As well as freeing up your time with tasks such as bookkeeping and ensuring you meet your tax obligations, an accountant can help with business development.

And with Making Tax Digital for income tax due to launch in April 2024, an accountant can help to digitise your accounts and ensure you are MTD ready.

For limited companies, their requirements may change as they grow to include other accounting functions such as VAT returns and payroll. Most small businesses do not have the budget to hire an in-house accounting team, so outsourcing is a cost-effective solution.

At this stage, it is wise to ask your accountant about regular financial information, providing you with the insight and analysis you need to make better business decisions.

For larger firms, a fully-fledged outsourced accounting team is often the answer, although a good accounting firm will happily work alongside an in-house team.

Whatever sized business you run, your accountant will work with you to assess your current accounting system and make recommendations on the level of service you require. At Spotlight Accounting, we have a number of different accounting packages to suit various sizes of business.

Benefits of outsourced accounting services

Outsourcing your accounting function to a professional accountant comes with many benefits.

High level of expertise

Few small businesses have the resources to hire a team in-house. Outsourcing your accounting is a very cost-effective way to access the accounting skill your business needs.

Save money

Hiring a full in-house team of accountants is a costly affair, with recruitment costs, National Insurance, pension contributions, benefits and training costs on top of salaries. So, by outsourcing accounting there is a considerable cost saving to be made.

Save time

Things like bookkeeping and payroll are extremely time-consuming and few small business owners have the time – or headspace – to devote themselves to them daily. An accountant can take the strain allowing you to focus on your core business.

Maximise your profit

Keeping hold of every penny of profit is essential to a small business. An accountant can seek out ways to make your company more efficient, from cost savings to tax efficiencies, making a real difference to your bottom line.

Accuracy and compliance

Avoiding errors and staying compliant is the most nerve-wracking aspect of accounting and can easily seem overwhelming – but not if you have a qualified team of accountants taking care of your numbers.

Grow your business sustainably

Regular management reporting is key to making better decisions and driving your business forward. An accountant will work with you to understand your goals and define a clear, aligned direction for the business.

How can I switch accountants?

Statistics show that 27% of businesses are working with an accountant that they want to switch from! Most businesses don’t switch accountants because they worry about the time and effort involved, but it’s easier than you may think.

At Spotlight Accounting, we take on the work for our new clients, liaising with their existing accountants to make the transition smooth and stress-free.

To find out more about our outsourced accounting services, then please fill in our contact form.


How much is an accountant for a limited company UK?

Most accountants charge a monthly fee for their outsourced accounting services. The cost depends on many variables, such as the types of services required and the size of the business. But you can expect to pay upwards of £100 per month. When you consider the value of the services provided and the money an accountant can help you save, it is a very good investment.

What types of companies need accountants?

All sizes of businesses can benefit from outsourced accounting, including self-employed sole traders, limited companies and larger businesses. The types of accounting services required may vary and evolve depending on your business needs, but the basic benefits are the same – saving time, hassle and money.

Can I do my own accounts for a limited company?

An owner-manager of a small business may choose to manage their own accounts, but it can fast become a full-time job. Many business owners can manage their finances when their company is in the early stages, but as they grow and start to take on employees, they find it becomes unmanageable.


It’s never too early to consider outsourcing accounting. It can benefit your small business at all stages of its journey, saving you time, money and hassle. An accountant can ensure you have sound processes in place, improve your profitability and help you to drive business growth. For many small businesses, it is the best investment they can make.

Learn more about how accounting services can support your growing business:

Carrie Stokes Chartered Accountant

Carrie Stokes Chartered Accountant

I work with directors of limited companies in Shropshire, Staffordshire and the West Midlands giving them a clear and up to date financial picture of their business that they understand. Looking at the numbers, what they mean and how they can be improved to grow their business.

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