Choosing the right accountant for your business is essential, as they will be handling your businesses/personal finances as well as advising you on future decisions that may cause large-scale changes.
There are a few things to consider before hiring an accountant, such as location, the type of help you need and which accounting software you’ll be using. You also need to ask yourself how much you will be paying the accountant and whether their help to reduce your business taxes will indirectly pay for their service.
In order for your business to benefit from having an accountant, they need to have experience and knowledge of handling finances and be able to save you time and money.
That’s why we have created this guide on how to choose the right accountant with all of the things you should consider.
Location
Once upon a time, it was necessary to have your accountant close to your business, however, with the advancement of technology, it is now possible to communicate online.
Thanks to cloud-based software, you can access your records at any time from any device (so long as you have an internet connection).
This allows you to see the exact same information from your device in your office as your accountant on their device in their office.
Whilst the option to collaborate from two different locations (even different countries!) is entirely possible, it might not be an option that suits your business, or your particular way of working.
If you prefer face-to-face communication over video conferencing, then choosing an accountant nearby is your best bet, as travelling long distances to meet with your accountant won’t always be ideal. This also means they’re more likely to be able to attend business meetings with you if this is something you would be looking for.
Things to remember: If your accountant is based in another country, make sure they are fully comprehensive in the laws of the country your business is based in, as you will be the one to face penalties if you don’t comply with the law.
Chartered Accountants
Having someone with plenty of experience and qualifications reassures you that your accountant knows what they’re talking about. Nobody wants an inexperienced accountant that could put their business at risk by making poor decisions.
The title ‘Chartered Accountant, or ACA and FCA qualifications indicate that someone has undertaken a minimum of three years of in-depth training and passed multiple exams in financial management, auditing, business strategy and taxation.
Whilst you can still use an accountant without professional qualifications for bookkeeping and general financial management, you will most certainly need someone with higher qualifications if you’re seeking to get a loan or if your company is ever audited or under investigation by HMRC.
Experience
If you own a small company and choose an accountant who has solely dealt with large corporations, you may not receive a service as beneficial as one from an accountant that has experience with smaller clients.
Not to mention, if they have worked with other clients in the same industry as yours, they may have gained unique knowledge that could help your business to flourish.
We would always recommend asking accountants that you are considering about their experiences, and whether they specialise in specific industries.
Involvement
Whilst some companies like to have all aspects of their finances handled by an accountant, others prefer their accountant do only what’s necessary.
This can be especially important if you are trying to save money. Lots of accountants charge by the hour, so giving them relatively easy tasks such as data-entry can be a waste of your money if this is something someone in-house can do.
As mentioned previously, cloud-based accounting can be seriously beneficial. This allows you to enter the data needed for your accountant to handle, and you don’t even have to leave the office to send it to them.
Approach
When looking for someone who is going to be handling your finances and helping your business to grow, you want someone who will be proactive about saving and making you money.
As in every industry, there will be people who do the bare minimum. To avoid hiring an accountant that may not be fully invested in you and your business, we would recommend speaking to friends/contacts within a similar industry, and asking whether they have any referrals they could provide. This way, you are speaking to someone who has had first-hand experiences with the accountant in question.
Software
Accountants will have preferences over which software they use and may only have experience with one brand.
Popular and commonly used cloud-based software include Sage, Xero and QuickBooks.
This is something important to bear in mind, as if your business uses a different type of software, you may experience technical issues when sharing data.
Whilst it’s possible to use other means of sending and receiving data, such as via email, this can be time consuming and makes your information far less secure, as emails do not have the same encryption as the aforementioned software.
That’s why finding an accountant who uses the same software, or one who is willing to do so- is a big factor when it comes to deciding on who to hire.
Investigate
Ok, maybe the word investigate is a little dramatic, but running background checks on your potential accountants can give you a much better idea of what they’re really like, rather than just going off what their website promises.
You can start out by reading online reviews. Many accounting companies have reviews from past and current clients online on websites such as Trustpilot, Google Reviews and UK Accounting Firms. Generally, if a firm has more low ratings than high, you should avoid them.
Once you have found out how your potential accountants rate, you could try contacting some of their past or current clients for their honest opinions.
You should use this opportunity to ask them any questions you really want to know, such as “How has ‘Accountant Name’ helped your business to grow?”
However, you should keep in mind that businesses operate differently, so what might not have worked for someone else, could work for you.
Interview
Interviewing a range of accountants allows you to compare their styles of approach, their cost and their personalities. This shows you how well you are likely to work together, but can also give you free advice that can help you to decide what type of financial help your business needs. Get each accountant’s price in written quotes, so you can go away and compare them.
Negotiate
Some accountants charge by the hour, others use a monthly retainer and some may charge a percentage of your turnover. Don’t just think about the short term when deciding on how you would like to pay.
Whilst paying by the hour now may seem wise whilst your business is small and you have less work to do, this may not be suitable in a years time when your company grows and more financial responsibilities come with it.
If the accountant of your choice isn’t offering the fee structure you’re hoping for, now is the time to negotiate instead of later down the line.
Last few tips…
Once you have weighed up all of these considerations and decided on your accountant, you should monitor how they are helping your company and measure their performance. This can be done by holding monthly meetings to find out what they have done, if it has worked and what they plan to do in the future.
For more information and advice, talk to us.