Choosing A New Accountant: The Ultimate Guide
Picking the right accountant is an important business decision and you need to ask the right questions.
It’s important that the right accountant can give insight into small business needs. Find out everything you need to know in our deep dive article.
Table of Contents
How to choose an accountant for your small business
Accountants offer differing levels of engagement, so establish how often you’ll be in contact, and whether you’ll correspond by email or telephone. Less contact often means less costs but can make it difficult to ask questions or spot issues. It can be difficult to build a long term, valuable, relationship with an accountant that you do not have regular contact with.
It’s possible that the person you meet on the phone or in person isn’t the one handling the work, particularly if you are dealing with a larger firm of accountants. Do you know who will be handling your account on a day-to-day basis? You must be confident that the person ultimately in charge of your accounts understands what you are trying to achieve. You must be satisfied that the person in charge of your account understands your business and is not going to palm you off to a junior.
Tips for choosing an accountant
Once you decide it’s time to hire an accountant, the next step is to choose one.
There are a few things you will want to consider first, and it’s important to take the time to do this right. Issues such as the accountant’s location, the division of workload and the type of accounting software you use will need to be considered. Consider if the accountant can help to reduce your taxes, and how much you’ll need to pay them for their services.
It’s in your company’s best interest to have an experienced, capable person handling your finances. Year after year, the right person will save you money and time. Equally, a poor choice can carry costs, financially and the level of work that is needed from you.
Does the location of your accountant matter?
The location of your company’s accountant used to be important. Today, more companies are using the cloud to manage their business. It means that location is less of a problem. No matter where you are, you and your accountant can view the same data at the same time if you are using the right software.
The decision about where to find an accountant comes down to your company’s needs, and location/proximity are only one factor.
It is possible for your accountant to be based anywhere in the world. If you’re willing to collaborate via email, phone calls, video-conferences, or secure accounting software, then you could be in Glasgow and they could be in London.
Don’t settle for a poor quality of accountant purely because they are local to you. It’s most important to find someone who really understands the specifics of your business or industry and can deliver the expertise and knowledge you require.
If you prefer face-to-face contact, having someone who’s able to go to business meetings with you, or review your finances face to face might be useful.
If this is the case, you’ll need to limit your search to accountants who are willing to travel to your premises from time to time, or accountants who work nearby.
They should be experts in the tax laws that apply to your business, regardless of their location.
Are things working out?
Once you have chosen an accountant, it is necessary to measure their performance. You can ask them about the business and finances at monthly meetings. It’s good if their view is close to yours. If you only hear what you expect though, that’s not a good sign – you want to see a degree of challenge and initiative.
A good accountant will be pro-active
Watching whether your accountant asks the right questions is part of assessing performance. At least every three months, a good accountant will ring you up to see how the business is progressing.
If they’re not keeping in touch to understand your goals and challenges, then they’re not really adding much value. Conversation and information sharing leads to trust in a relationship.
Engagement in dialogue is the best way to get the most out of your accountant. Ask questions and be forthcoming with information and data when asked.
The more you share about your business, the more value you will derive.
Make sure your accountant is qualified
Make sure that all prospective accountants are fully qualified. Most firms are members of a recognised accountancy body such as the ICAEW (Chartered Accountants), ACCA (Certified Accountants), or ICAS (in Scotland).
Choose a certified or chartered accountant
For peace of mind, choose an accountant that’s regulated by a professional body or recognised by the government.
It’s possible to use accountants who don’t have an equivalent professional qualification for things like tax preparation. However, you’ll almost certainly need those higher qualifications on your side as your business grows.
How much will your accountant cost?
How much will your accountant charge? Are they an annual fee or a monthly one? Are there any fees for entering or leaving? Extra work will likely cost more if it falls outside of the agreed tasks. Make sure you have a clear idea about what these costs will be to avoid any nasty surprises. If you move from another accountant before year end, will they charge any catch up fees?
The more detail you do on costs prior to engagement, the better you will be positioned to ensure a smooth and mutually beneficial relationship.
Consider Multiple Accountancy Firms Before Deciding
It is advisable to contact several firms when selecting an accountant, before making your final choice.
Or you can use a service like Go Impartial where we will understand your needs and goals and connect you with firms that are likely to give you the right service.
From your initial dealings with each firm, you should get a sense of what it will be like to work with them. If you feel like you can build a good relationship, your intuition will be the best guide at this time. In the end, almost all accredited accountants will be able to process basic financial requirements, such as your tax returns.
More important is whether you ‘click’ and feel there is scope to work as partners with each other. Before signing up ask if you can meet each accountant. This will also give you an indication about how interested the firm is in winning your business.
Large or Small Accounting Firm?
Smaller accountancy practices tend to understand the needs and requirements of smaller companies.
The size of your accounting firm is important. Whilst not true in all circumstances, selecting an accountancy firm that is a similar size to your own business can be a useful rule of thumb. Small firms will probably suit you best if you are a sole trader or contractor. You will be looking for a medium-sized firm to match if you are a fast-growing start-up.
Ask About Accounting Software
Before selecting an accountant, ask what software they recommend to their customers.
If the accountant is not using a cloud software solution, this can be a warning sign that their working practices and methods of communication may not be optimal.
Some accountants still use same desktop accounting software. This will present problems. There are different solutions available, and your accountant should be to teach you how to use the software and perform the initial set up.
Some accountants can even secure you a discount on the typical price of cloud software through partnerships they have with the provider.
Communication with your accountant
Poor communication is one of the most common problems with accountants. If paperwork isn’t returned in a timely manner and you have to wait days for a reply to a tax question it can be very frustrating.
A good accountant can and should do more for you than just processing your taxes and annual accounts.
A great accountant can help raise money for your business by looking for government funding, tax relief schemes, and grants. They can help with everything from finding new investors to selling your business’s shares if you need to.
Your accountant should tell you what your business is entitled to. If they help you to claim back money you didn’t know you were entitled to, you’re more likely to feel you are getting value from the relationship. This is certainly one of the areas that high quality accountants separate themselves from mediocre ones.
Dealing With Bad Accountants
Some accountants only care about the fee, others are too busy to give you the service you need, which can cause your business to suffer and pay more taxes. What’s the point of paying an accountant if you don’t get a first-class service?
Regardless of your size, profit or loss or other factors, if you are paying for a service, then you should expect to get it. Don’t let a poor accountant cost you money, lost opportunities, and time. Be prepared to change and move to a new provider.
Should I find an accountant with relevant experience?
It’s crucial for businesses in certain sectors. Generally speaking, rules and laws for most business are the same. It’s important to find an accountant with a good track record of working for businesses similar to yours.
There is little point engaging them if you are a small business and they typically only serve multinationals! You should also prioritise the relationship and their desire to make your business succeed.
Specialist vs Generalist Accountants
Most qualified accountants can provide a service to you, but there are many specialist firms of accountants. For example, those who only deal with contractors and freelancers.
These firms can be appealing by offering specific services that match the niche you are in.
This type of accountant usually offers a package for a fixed monthly fee. Look for features such as whether it includes preparation of accounts, corporation tax return, payroll, statutory affairs and telephone support.
The offers and packages you will find may differ from company to company, so do some solid research when comparing different accounting firms.
Most firms will offer a cloud-based solution for you accounts. Popular choices are free agent, QuickBooks, xero, or sage. However, there are others out there including custom made solutions that some practices use.
Getting this decision right is important as it will streamline communication between you and your accountant and done well, the right software package can save you time as well as money.
You should still look to make sure the firm have appropriate qualifications in place. Another good question is whether the accountants have a code of ethics in place.
Most specialist firms are perfectly reputable and do a great job, but it’s worth doing your homework to make sure there are no nasty surprises coming at the expense of saving a few pounds each month.
You could anticipate paying fees in the range of £60 – £120 per month for a specialist package, depending on features and industry.
Paying less up front, may mean hidden costs for set work that needs to be completed later, so do your best to get a true cost for comparison.
Does the price you’ve been quoted include all services? Or are some chargeable as extras? If so, what are they and how much do they cost?
As with most things in life, the cheapest may not be the best. You typically get what you pay for.
Changing accountants
It is possible to change accountants if you make a bad decision. During the transition there will be a bit of pain and hassle, but it should be over in a couple of months once the new accountant understands how you work and the details of how your business operates.
If you outgrow your current accountant and move out of the target base of customers they are designed to cater for, it’s a good sign that it’s time to look elsewhere. This can happen if you start earning more money, or the business grows and you need tax planning advice. Sometimes it can be driven by a new need to employee staff.
Depending on the firm, different packages may be available to accommodate your growth and change of circumstance, so that you stay with them throughout your journey. You can get better long-term support from an accounting firm that gets to know you and can adapt to your changing needs.
Leverage Social Media
It’s the 21st century and many accountants are active on social media. It would be surprising if a high-quality accountant did not have a LinkedIn profile.
You can do some due diligence on them by checking if they have endorsements and recommendations from existing customers. If they do, how recent are they?
You want to see if they have a profile and if they have any recommendations from customers. Taking these steps allows you to assess whether other people are satisfied with their experience of doing business with them.
Maintain a good relationship with your accountant
You should aim to have a good working relationship with your accountant once they are hired. Ideally, a monthly dialogue with your accountant is a good idea, so they can stay current and be well placed to offer advice and planning.
Keeping the relationship healthy is a two-way street. Sure, you want your accountant to be responsive and helpful, but you can make their life easier by being organised – provide clear documentation when asked for it. Try and keep accurate records, such as receipts.
Many modern accounting software platforms allow you to take a picture of a receipt and store it digitally. This is much better than handing over an old box of paper and expecting the accountant to deal with it.
Time is money. The less time your accountant has to spend on jobs that are below their paygrade, the less they need to charge you and the more time they can allocated to strategic business advice and planning. Your accountant should continue to provide all the services you need, and the cost shouldn’t suddenly change.
Taking Next Steps
Now you have everything that should be considered when it comes to choosing an accountant, contact us at Go Impartial and we will connect you a specialist accountant that will meet your unique needs.
