All You Need to Know About Online Accountants
Online accountants have been around for a long time, but the real shift took place when cloud-based bookkeeping went mainstream. Firms that ran fully online suddenly had the power to offer something truly new: live, remote, and often cheaper services, to an audience that spans the entire country, not just whoever happens to be nearby.
For small businesses, the rise of online accountants has been transformative. You don't have to trudge to a local High Street office, and you don't have to pay the premium that comes with the overheads of traditional firms.
What is an online accountant?
An online accountant is a qualified professional (or a firm of professionals) who delivers all their services remotely. That doesn't just mean email and phone calls, it means that everything from bookkeeping, year-end accounts, and tax returns happens digitally via cloud platforms.
In fact, many online accountants provide clients with their own cloud-based accounting software, such as Xero, FreeAgent, or QuickBooks Online. The client enters their day-to-day transactions, and the accountant reviews, corrects, and files everything on their end.
Online accountants vs traditional accountants
Traditional accountants are typically local, office-based firms. You'd meet them face to face, drop off your paperwork, and wait for them to work through it. It's a model that's worked for decades, but it has some drawbacks for smaller businesses:
- Higher overheads – office rent, staff, parking, etc. These costs are passed on to you.
- Limited availability – Office hours only. Need help at 8pm? You're on your own.
- Geographically restricted – You're limited to whoever is nearby.
Online accountants tend to operate with lower overheads, which often translates to more affordable pricing. And because everything is cloud-based, there's usually more flexibility in terms of when and how you communicate.
That said, some people prefer the personal touch of sitting across a desk from their accountant. It's about finding the right fit for your business.
What services do online accountants offer?
Most online accountants offer the same services you'd expect from any accounting firm:
- Bookkeeping and bank reconciliation
- Self Assessment tax returns
- Corporation Tax and Company Accounts
- VAT returns
- Making Tax Digital compliance
- Payroll
- Company formation
- Financial advice and planning
Some also bundle in accounting software as part of their package, so you don't need to pay for it separately.
How much do online accountants cost?
Prices vary. A lot. Some online accountants charge a flat monthly fee, others charge per service or per hour. Broadly speaking, you can expect to pay anywhere from £30 per month for basic sole trader packages, up to £150+ per month for limited company packages with full support.
Many firms offer tiered pricing, so you can pick a package that matches the level of support you need. A sole trader with simple affairs will pay far less than a limited company with employees, VAT, and complex expenses.
Choosing the right online accountant
Here are a few things to look out for when comparing online accountants:
- What's included? Make sure the monthly fee covers everything you actually need. Some firms advertise low headline prices but charge extra for essentials like VAT returns.
- What software do they use? If you're already using Xero or QuickBooks, check your new accountant supports the same platform.
- Response time. How quickly can you expect a reply? Some firms guarantee same-day responses; others might take 48 hours.
- Qualifications. Look for accountants who are qualified (ACA, ACCA, CIMA, AAT) and are members of recognised professional bodies.
- Reviews. Check independent reviews and ratings before committing. Sites like Trustpilot and Google Reviews are a good starting point.
Do you still need accounting software with an online accountant?
Usually, yes. Most online accountants work by giving you access to a cloud-based accounting platform. You're expected to enter your transactions (or connect your bank for automatic feeds), and the accountant handles the rest.
If you're not sure which software to pick, take a look at our reviews to compare the most popular options available to UK businesses. Alternatively, many online accountants will include software in your package, so you may not need to choose at all.
The bottom line
Online accountants are a fantastic option for UK small businesses. They're typically cheaper, more flexible, and easier to work with than traditional firms. The key is to do your research, compare packages carefully, and make sure the accountant you choose is the right fit for your specific business needs.
If you're looking for accounting software to complement your accountant, or you prefer the DIY approach, check out our best accounting software recommendations to find the right tool for you.