How to find an accountant
Having a good accountant can be very beneficial for a small business - but how do you find a good one!? They can help develop your business plan and handle your tax efficiently by filing annual tax returns and company reports on your behalf. They can help you keep your finances in order by setting up a bookkeeping system and payroll scheme. Accountants will make sure you are compliant with the tax rules, avoiding you from paying penalties and tax inspectors.
A good accountant can provide financial insights for your business. Also, they can build accurate financial reports and conduct audits which is essential when looking to secure a loan. Also, they will save you more money than you spend on their services. It's important to take the time to find the accountant that's best for your business and your specific situation.
How can I find a good accountant?
Recommendations are great, so you should ask family, friends and other business owners about the accountants that they personally recommend. You should check if they are qualified as legally anyone can be an accountant. This can be done by searching through the membership list of one of the professional accountancy bodies in the UK.
Some of the professional accountancy bodies are:
- Institute of Chartered Accountants in England and Wales (ICAEW)
- Institute of Chartered Accountants of Scotland (ICAS)
- Chartered Accountants Ireland (CAI)
- Association of Chartered Certified Accountants (ACCA)
- Chartered Institute of Management Accountants (CIMA)
- Chartered Institute of Public Finance and Accountancy (CIPFA)
This gives you the confidence that they possess the experience and knowledge to advise you in the right way. As a member of an accounting association, it is mandatory for them to keep their skills and knowledge up to date. Also, they have to provide you with a complaints procedure and indemnity insurance. This means you will be covered from any loss you make by being provided with inadequate advice by your accountant.
Choosing the right accountant for your type of business
When you are choosing an accountant you need to carry out some research about them and ask for clients references and testimonials. It is important that the business owner takes the time to interview the potential candidates.
You should consider meeting face to face with at least three candidates and preparing a range of questions to ask in the following areas:
- Qualifications - You should find out the professional qualifications they have and if they are currently a member of a recognised association. If they are part of an association, they are going to be regulated, therefore you can hope to receive a good service. If you have any problems, you can complain to their specific association if you are not happy with their service.
- The number of small businesses they have worked with - It’s essential that you work with an accountant who has good experience in your industry and understands the complications of managing a small business. For example, if you have an online business then you need someone who has experience with e-commerce.
- The services they offer - Do they offer services such as bookkeeping, tax advice and auditing assistance? If you have specific needs, choose an accountant with experience in that area.
- Communication - If your business accountant is to become a trusted partner, you need to see who is going to be handling your business daily. Make sure you meet face-to-face with the actual accountant that will be doing this. If you’re a very small business, it’s best to work with a similarly small accounting firm as working with a big firm may mean you might be left to work with a more junior-level accountant.
- Fees - Accountants charge their clients per hour or a fixed fee. Per hour fees can change depending on the task. You need to find out what their fees will cover, so you know what’s included and what could lead to extra charges. A fixed fee is good for a small business that wants stability. If you want to keep your costs down, then you should do what you can to help them do their job, such as providing information or documents quickly when required.
- How they can help you grow - A good accountant can help your company grow, by structuring your financial model and offering advice on practical business issues. This could possibly reduce costs in the short and long term, hence saving you some money.
Once you’ve chosen your accountant, they should send you a ‘letter of engagement’ that sets out the terms and conditions of your agreement.
What to expect after you have chosen an accountant
After you have hired an accountant, you should aim to build a good relationship with them. You should keep in touch throughout the whole year and contact them at least once a month to get advice on a range of financial matters such as changes in your business, costs, etc. Make sure you are organised with keeping all your records correct and clear, as this will reduce the time they will spend on for e.g. filing your tax returns for self-assessment deadlines, annual reports, etc. Therefore, reducing the amount you will be charged.
Lastly, make sure you are reviewing your charges frequently and whether your accountant is continuing to provide you with the services required.