By Ashley Preen
July 11, 2018
Choosing an accountant is an important step when growing your business, as choosing a good accountant could be essential for growing your business at a sustainable rate whilst ensuring that you fulfil your tax obligations with HMRC. Sometimes, as your business grows, your tax liability changes, and it’s essential to be able to plan ahead so that you’re not caught out by a large and unexpected tax bill come April.
So, before you choose an accountant for your growing business, what do you need to consider? Here we give you an overview of the most important factors to consider when choosing an accountant for your business.
There’s a growing trend of businesses using online or virtual accountants who handle all their services from afar, perhaps even from the other side of the country. While this may seem convenient, it can inevitably lead to unforeseen problems and mistakes, especially if you run a business which is rather complex. These cloud-based and software-based accountants usually require their clients to perform their own bookkeeping, filling in the figures via the online software, which then gets sent to the remote accountant for review.
The problem with this is that business owners are more likely to make mistakes when performing their own bookkeeping, meaning inaccuracies are more likely to occur. This could easily lead to an HMRC investigation or cause your tax bill to be inaccurate, both of which are not good news for a growing business, and could result in crippling legal fees. It’s best to work with an accountant who is close to your business and who performs a full bookkeeping service – ensuring that no costly mistakes can be made. Working with a nearby accountant also allows you to see them in-person to receive advice and consultations which are much more in-depth and reassuring than a quick email or phone call.
When it comes to your accounting, you certainly don’t want to work with a flaky fly-by-night company; you want to work with an accountant who is reputable and qualified. After all, they’re looking after your company’s finances! Chartered/certified accountants are those which have been regulated by a professional accounting body or officially recognised by the local government. Depending on your country, they could be titled as a Certified Public Accountants, a Chartered Accountants, a member of the Association of International Accountants, or a member of the Institute of Financial Accountants. If the accountancy firm you’re looking into boasts one of these titles, you can usually rest assured that they will be on the up and up.
Now, if you’re looking to save money or if your business is relatively small/simple, then it is possible to use accountants who don’t have these titles, and it is still completely legal to do so. If you’re looking to conduct some simple tax preparation, bookkeeping, or basic financial matters, then this may be the best way to go for you. Nonetheless, if your business is investigated by HMRC or you’re looking to qualify for a loan, you’re best having a highly-qualified accountant in your corner to back you up.
Although it’s easy to think of accountancy as a one-size-fits-all job, accountants do tend to specialise in different fields. For example, if you’re a small business who needs help with their tax returns, perhaps you should look for an accountant who has a lot of experience helping businesses such as your own in that area. Similarly, if you’re a larger business who requires a full bookkeeping service, you need to work with an accountant who has the expertise and experience necessary to handle that kind of workload. Although many modern accountants promote remote cloud-based accounting services, we would recommend that you work with an accountant which takes care of your bookkeeping services for you, and who you can visit in-person if necessary.
When considering the experience of an accountant, you should also inquire about their experience within your particular industry, as this could streamline the accountancy process. Also, if your business is on track to grow exponentially in the future, perhaps you should check that your accountant has clients which are larger businesses than your own, as this implies that they will be able to handle the growing workload as your company expands. A great accountant should be able to assist you with your company’s growth!
A simple Facebook post or phone call could easily lead you to the right accountant for your company. Online reviews and company advertisements can often be misguided or false, and often the best sources to rely on are the real-life sources in your social networks. Do your friends and family use accountants of their own? Do you know business owners with similar businesses to your own who use accountants? Tapping into your social networks can provide you with unbiased reviews of certain accountants and how they work, as your friends/family members have no skin in the game, so to speak.
Of course, you should always consider that the accountants your contacts recommend might not be suitable for your business, even if they are suitable for their own. The best accountants for a small hairdressing salon may not be right for your medium-sized restaurant, for example, as the bookkeeping practices and expenses involved with the two are at different ends of the spectrum. Nonetheless, there’s no harm in calling up an accountant that your contact uses and asking them about their experience within your own industry.
When choosing an accountant to work with, you need to ensure that they have the necessary experience and expertise to benefit and grow your business naturally. It’s also crucial to work with an accountant who provides a full bookkeeping service, as this mitigates any mistakes or inaccuracies and lessens the chance that you will be investigated by HMRC for paying the wrong amount of tax. If you can work with an accountancy firm which is situated close to your business (as opposed to a remote cloud-based service) then this is also beneficial, as you will be able to visit them for face-to-face consultations and in-depth advice regarding your business’s future.