Choosing the right accountant for your business can be difficult. The harsh reality is small businesses often choose their accountants based on location, poor recommendations or sometimes they just choose anyone because their tax return is due in two days and they have run out of options. Don't be that business.
When should you choose an accountant?
This is one of the first things you should do when you start your business. Your accountant will advise on selecting the right business structure and help you with your business planning where finance is concerned.
The right accountant should be qualified through one of the main accountancy bodies. I know this sounds pretty obvious but it is a step that is often missed.
The three main accountancy bodies are:
- Charted Institute of Management Accountants (CIMA)
- Institute of Chartered Accountants (ICAEW or ICAS)
- Association of Chartered Certified Accountants. (ACCA)
How to choose the right accountant for your business.
First and foremost the right accountant for your business should be qualified. The accountant you choose should also have relevant experience preparing financial documentation for companies of a similar size and revenue. It would be even more beneficial if the accountant has worked with companies in a similar market sector to yours.
Searching for the right accountant can be frustrating at times. We have found, that best way to find a great accountant is by using the internet and LinkedIn. Simply search for "Accountants" and "your location" in Google and review the results. Once you have found a few accountants that look right for your business, search LinkedIn.
Use LinkedIn to delve a little deeper and look for:
- Who are they connected to?
- They should have a strong network of professional people.
- What are their recommendations like?
- They should have good recommendations from their clients.
- Do they have relevant experience?
- How long have they been in business? They should have worked with similar business' to yours.
- What qualifications do they have?
- They should be qualified accountants through one of the main accountancy bodies.
Find out the difference between an accountant vs a bookkeeper...
Once you have found what looks to be the right accountant for your business, the last step is to interview them. Here are some questions to ask when you are interviewing your potential accountant. Remember the right accountant for your business is dependent on your requirements too.
1. How often will you get in touch with me and what is the best way to contact you?
This will establish how often you will contact and by what means of communication, IE by phone, email or Skype. You will also want to know whether the accountant will contact you every month, once a quarter or only once a year.
2. What type of considerations should I consult with you about?
A skilled accountant should get to know your business and you, to keep you aware of various factors that could affect your bottom line. Your accountant should be confident in several disciplines, including corporate and individual tax, and financial planning. Your accountant should work with you that makes it easy for you to understand and consider what actions you need to now and / or in the future.
3. How can you help me with my business and make it grow?
A proactive and qualified accountant can help small business owners to expand their business, only if the right groundwork is in place with you at the start of your relationship and business. You must start with a financial plan and goals and update them on a monthly basis.
4. How can you help me with my cash flow?
Projecting your business’s cash flow is essential to running your business and knowing your Financial plans. Detailed cash flow charts aren’t easy to work with, and that is what you have an accountant for.
5. What accounting software should I be using for my accounts?
Your accountant should know how all the accounting software packages work. From Sage line 50 which is PC based, to the various types of cloud based accounting software. Once your accountant has advised you on what accounting software is best for your industry, he should be able to set up the Chart of Accounts for you before you start using the software. Once your accountant has set up the accounting software for you, you are ready to process your monthly paperwork. If you are unsure about how to process the paperwork. Maybe speak to your accountant about a possible bookkeeper they could refer you to.
6. Do you work on my accounts personally or is it outsourced?
I can honestly say that accountants do not work on your accounts / bookkeeping personally. If fact, most do not even do the year end tax accounts. You will find that the accountants office will have junior clerks that do the bookkeeping and year end accounts. The accountant will do all the necessary checks once the junior clerks have completed the accounts.
Again, it may benefit you to ask if they know of a bookkeeper who they could refer you to. In most cases, it works out cheaper to take on an outsourced bookkeeper, than to pay an accountant’s firm to do the bookkeeping.
7. What do you need me to provide you with, at the end of the Tax Year?
If your accounts or bookkeeping is done in an accounting software, you need to give your accountant access to the software, if it is cloud based or if it is PC based, provide a backup of the accounts from the software. You will also need to provide copies of any other paperwork he may need to complete your tax return. IE Copies of bank statements, any assets you may have purchased.
8. What is your full range of services?
Most accountants offer a range of services, however some accountants may specialise in one or two areas.
9. At the end of the meeting with the accountant, I always ask, “So what makes you different from other accountants and why should I choose you as my accountant?
The answer to this question, all depends on how you feel about the answers the accountant has given you and how comfortable you feel in his / her presence. Do they make you feel at ease? Have they answered all your questions to your satisfaction or did they try to avoid the question?
10. This is not a question. Once you have spoken to an accountant, my advice is not to sign up straight away with that accountant, if he/ she is the first one you have seen.
I would go and interview a few more accountants. By doing this you can establish which one of the accountants are for you. Which of them feel right for you and your business. Are they proactive? Do you feel they are giving you good advice?
See how you feel and choose the accountant you are most comfortable with and the one that is right for you and your business.
Good Luck.
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