tips on choosing an accountant for your start-up or small business
If you ever consider selling your business, or even buying another business, you will find that a good accountant will be an invaluable advisor.
One final piece of advice is to ask other small business contacts if they recommend their own accountants. You simply cannot beat a recommendation from someone you trust.
From own own experience, the two biggest problems we have found with accountants in the past involve poor communication, both between client and accountant, and between accountant and HMRC / Companies House.
Consider choosing an accountant that has embraced ‘modern technology’ (i.e. some aspect of online accounting / communications as a minimum), as this is often a sign that the firm is efficient and forward looking.
Ask a prospective accountant if you can talk to some existing clients before signing up.
we often find that smaller firms of accountants tend to understand the specific needs to smaller companies, and can often be more ‘reactive’ than larger firms.
Always contact several firms when choosing an accountant. You should get a feel of what it will be like as a client from your initial dealings with each firm. It is essential that you feel like you can build a good relationship, so your intuition will be the best guide at this stage. Ask if you can meet each accountant and discuss your needs before signing up.
Top Tips for Choosing Accountants for Small Business
If you are a start-up business, engage professional accountants for small business at the earliest, as they will be able to give advice on numerous essential things, including establishing streamlined bookkeeping and accounting processes.
Ensure the prospective accountants are well qualified. Most accounting and consulting firms in the UK are members of an established accountancy body, such as ACCA (Association of Chartered Certified Accountants) or ICAEW (Institute of Chartered Accountants in England and Wales).
Ensure the accountant has experience of dealing with small businesses that are in the same trade sector as your business. If you are a law firm or a financial services firm, for example, it will be in your best interest to engage specialist accountants instead of “general” accountants for small business.
See how much the accountancy firm will charge you and value will they add to your business. Also, find out how they will charge you – monthly or annually? Can the accountancy firm you decide to pick offer a bespoke quote?
Find out what additional services your accountants provide. Along with normal tasks, such as bookkeeping, payroll management, annual accounts preparation, etc., will your accountants for small business help with tax planning, tax return, company formation, management consultancy and other services that are essential for your business?
Tips for Choosing the Right Accountant
Don’t rush it
This is potentially a game-changing decision for your business. The right accountant can be the catalyst for you achieving your goals faster, for ensuring your finances can withstand shocks and for helping you grow a stable organisation that stands the test of time.
Don’t be shy about the money
Get the fees and charges agreed upfront, along with how and when you will pay. You need to know exactly what you’re getting if you’re to be able to judge value-for-money, so establish what is included in the price and whether you will be charged any ‘extras’. Then you’re ready to compare quotes. Don’t be afraid to negotiate either – remembering to ensure it remains a win-win.
Speak to some of their clients
If you think you know who you’re going to choose, ask to speak to some of their clients. You should expect glowing references as a given, but try to get an understanding of why these cients are such enthusiastic advocates.
Check the credentials
It is essential that the accountant you choose has a professional qualification. The main UK bodies are ACCA, ICAEW and CIMA and you can verify membership online quite easily. Apart from the assurance that proper training has taken place, you can also feel comfortable that they are signed up to a strict code of ethics, carry liability insurance and will have a practice continuity agreement in place with another practice should anything dreadful happen to them.
What’s required of you
Each accountant will have their preferred way of working and the extent to which you’re involved in that depends very much on what services you are asking to be provided. But you want the outcome of this process to be that the accountant works for you, not the other way round. If you are having to dedicate chunks of your time to collating information and answering questions then you’re distracted from focussing on your business. Your time is perhaps your most valuable commodity and should be as much a part of this decision as the proposed fees.
Tips for Choosing an Accountant
Must consider alternative payment schedules
Accountants have typically charged hourly rates like most professional services. However, the move to cloud accounting software has kicked off a trend towards fixed-price billing.
Firms have convinced clients to pay half or all the fee up-front for a specific service before work starts.
Must give the best advice, not the easiest
Some accountants only tell clients what they want to hear and avoid the difficult conversations. Clients sometimes need to be pushed into considering better ways to increase and protect their business wealth, Munro said.
Must be organised
An accountant must also have time management skills and know where their time is best invested across its range of clients. “If you do a little bit for everybody, you would probably miss the boat,” said Langlands.
Must understand the options in accounting software
There are more than seven accounting software companies active in Australia. Accountants disagree on how many programs a firm should support, but no single package suits every business. “It is necessary for accountants to be knowledgeable about multiple products. Accountants can then assist a client to select the most appropriate package for their needs,” said Deloitte’s Tania Triffit.
Must have technical knowledge
There is a general consensus that practitioners need to possess a high level of knowledge in accounting and business software to ensure clients obtain the most from their software packages. The level of technology knowledge has risen as conventional tasks such as data entry into a general ledger have given way to analysis, reporting and advice.
tips for finding the right accountant
Ask the right questions
Once you’re armed with all the background information and able to weed out the bad seeds, you’ll want to make sure you ask the right questions of the final select few. You’ll naturally focus on some of the basic things you’ve got to know, like pricing, services they offer, what certifications they possess and the software they (and you) will use. But you will also want to ask more probing questions designed to find out what makes them tick and whether you can get along. What’s their philosophy on customer service? How do they feel about online collaboration? How would they design a financial success program just for you? How do they achieve work-life balance? What’s their idea of a good client relationship?
Prepare for interviews
After you have found a few select candidates, you’ll want to start preparing for the interview process. Yes, you really do need to conduct interviews. You are gearing up to hire someone who can influence the success (or failure) of your business. You want to get this right. You honestly can’t afford to have your financial partner making mistakes, can you? And you need to know you can trust that person. After all, he or she will have access to your books, your payroll and sometimes even your banking information. As such, you will want to go into your interviews with as much background information on your prospects as possible, as well as a list of questions you’ll ask.
After you’ve decided what you want in an accountant and where that professional should be located, you’ll want to begin your search for the right one. So where do you look to find a great accountant? A good place to start is with your friends and colleagues. Ask for recommendations. See what they like or dislike about their financial partners. Ask what they might do differently if they were hiring one today.
Decide if location matters
Back in the day, many small business owners found accountants by opening up the Yellow Pages, circling a few ads that looked promising and calling some prospects. They all had one thing in common: they were nearby.
Know what you want
First, decide if you want an internal or external accountant. Many small businesses struggle with hiring an internal accountant because of the cost or their low volumes of financial transactions. So they opt for outside accountants on a consulting basis, which typically costs less than a full-time or part-time employee. Businesses often consider hiring in-house accountants when their transactions have become large and complicated enough that farming them out would be somewhat cost prohibitive.