Accountancy is an integral part of your business as it allow the analysis of financial and economic events of your company.
Business Accountancy Overview
Keeping track of where your money is coming and going poses difficult questions that all new companies must consider: should you use an accountant or do it yourself? it is understandably tempting for first-time businesses to skimp on investing in their financial arrangements, but to do so could lead to problems further down the line.
Top Tips For Choosing An Accountant
It’s important to take the time to do this carefully, and there are a few things you’ll want to consider first. You’ll need to think about issues such as the accountant’s location, the division of workload and the type of accounting software you’ll use.
Ask Yourself If Location Matters
It used to be important to have your company’s accountant located nearby. But today, more companies are collaborating online, using cloud-based technology to manage their business
What Are Their Qualifications?
Choosing the right accountant is one of the most important decisions a small business can make. A good one can save you time and help your business grow; a bad one could cost you much needed money.
There are various accounting software packages on the market but is there really a ‘one shop fits all’ when it comes to accounting? The simple answer is no.
Purchasing the right software can be like buying clothes for your children; if it fits just right today, then you’re likely to outgrow it quickly.
Whilst your business is in its infancy, a smaller accountancy practice is likely to have gone through all of the pain of starting up a business themselves and could afford to dedicate more time to hand-holding clients.
Choosing An Accountant
If you’ve taken the leap towards an entrepreneurial lifestyle and established your own company, you may have thought about hiring an accountant. Whether you employ someone full-time, or use the services of an existing accountancy practice, choosing your accountant is an important decision for your business.
For first-time entrepreneurs, there is a wealth of regulation to overcome and comply with when it comes to finance, for which the services of an accountant would be invaluable.
There’s the issue of registering for VAT (currently 20%). Setting up a business for the first time is far from easy, especially if you’re unfamiliar with tax issues or have difficulty processing legal jargon. It is important to remember that getting the admin right at this stage is just as important as developing your business idea
The right accountant should ensure that you are compliant with Companies House and HMRC, and help you to avoid unwanted fines, penalties, and tax bills in order to help your business grow. However, some businesses grow just fine without an accountant to support, advise and file accounts, so it’s up to you to decide on the best course of action for your business.
Choosing an accountant is like choosing a new business partner. The right accountant will become a trusted colleague you can depend on, who offers advice and guidance as your small business grows. So, what are the top things you need to look out for?
Top Tips For Choosing An Accountant
Once you’ve decided it’s time to hire an accountant, the next step is to choose which accountant to hire.
It’s important to take the time to do this carefully, and there are a few things you’ll want to consider first. You’ll need to think about issues such as the accountant’s location, the division of workload and the type of accounting software you’ll use. Consider how much you’ll have to pay the accountant, and whether they can help to reduce your business taxes.
It’s in your company’s best interests to have an experienced, capable person handling one of the most important areas of your business – your finances. The right person will save you time and money year after year. So, here are some things you should consider when you’re choosing an accountant.
Ask Yourself If Location Matters
It used to be important to have your company’s accountant located nearby. But today, more companies are collaborating online, using cloud-based technology to manage their business. This means that location is less of an issue. With cloud accounting, you and your accountant can view identical real-time data at the same time – no matter where you are.
The decision about where to find your accountant really comes down to what suits your company best. Depending on how you want to handle the finances, your accountant could really be based anywhere in the world. For example, if you’re happy to collaborate via email, phone calls, video-conferences, or secure accounting software, then you could be in New York and they could be in London. If your accountant can be anywhere in the world, you don’t need to make compromises based on their location. You can find someone who really understands the specifics of your business or industry.
On the other hand, you may prefer face-to-face contact and find it useful to have someone who’s able to go to business meetings with you. If this is the case, then you’ll need to limit your search to accountants who work nearby or are willing to travel to your premises from time to time.
Wherever they happen to be based, make sure they’re an expert in the tax laws that apply to your business.
What Are Their Qualifications?
Choosing the right accountant is one of the most important decisions a small business can make. A good one can save you time and help your business grow; a bad one could cost you much needed money. Yet with thousands to choose from, it can be a daunting call to make, therefore, take your time with research.
Meet with a least three candidates before making a final choice, and ensure you ask these fundamental questions during these meetings.
- Are they regulated by a professional body? An ICAEW (Institute of Chartered Accountants in England & Wales) member, for instance, will have professional indemnity insurance, meaning any losses to your business due to bad advice will be covered.
- Can they share testimonials from customers, or better still, can you meet a current client?
The important thing is you treat these meetings like a potential interview with a new employee, otherwise you’re only going to get their “PR pitch.”
Could My Money Work Harder?
Most people believe an accountant will just be looking after annual accounts and tax compliance. However, that’s only a small portion of what a good accountant can and should be doing for you.
They can help you raise capital by finding grants, government funding pots, and tax relief schemes. People tend to say, can you balance my books? Whereas what they should be asking is: what am I entitled to that I don’t know about?
The money an accountant can save your business must naturally be weighed against the costs of employing them. Start-ups are cost conscious, so ask what you can do yourself. For example, can you cut down the time you need from an accountant by entering info yourself via an on-line accounting tool?
The crucial thing to establish when choosing an accountant is ‘how much will their services cost?’ You should also ask how often you will be billed by them as some charge annually, monthly or hourly. Talk money up front, otherwise you’ll be in for a shock once you’ve committed.
Are We A Good Match?
The right accountant will have more than just prestige – it’s important they understand small business needs and are able to offer relevant insight.
Small businesses can be naïve about their requirements with 59% of start-up directors running a company for the first time, which is why it’s so important to ask an accountant if they work with small businesses or have expertise in your sector. That way, you’ll feel confident they understand your challenges, and their prices are more likely to suit you.
Accountants also offer differing levels of engagement, so make sure to 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.
At a larger firm, the person you initially meet or speak to on the phone might not be the person actually handling the works so it’s important to establish who will be dealing with your account on a day-to-day basis. You’ve got to be satisfied that you’re not being palmed off to the office junior, and that the person in charge of your case understands your business.
The final thing to do is obtain an Engagement Letter; You’ll want to do everything you can to keep your business safe. This doesn’t just mean protecting your business from fraudsters, scammers and cyber threats – you should also be sure to cover yourself in case of disputes with your accountant.
In order to safeguard your business, make sure you’ve got an engagement letter issued by the accountant, and take your time to read through it: it’ll be your reference point for any potential disagreements with your accountant over the level of service required from them, and should ensure you always remain on the same page.
In summary the steps you need to follow to help choose an accountant that will add the most value to your practice are;
- Identify what your business needs
- Do your research
- Ensure that they are aligned with your business:
- Get to know their fee structure:
- Obtain an engagement letter
Find the Best Business Accountancy
Starting a new business do you need an accountant?
Exciting Futures was created as an all-in-one solution by bringing together the tools or services you may need to run your business! When you map out your business model, business accountancy may be one of the overall parts your business needs to review if required and next steps.
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