Top 15 tips for choosing the right accountant for your business

Choosing the right accountant is a very important decision to make for a small business. If chosen correctly you could save time and will help your business grow. A bad one could cost you money and you could miss out on things you should know.

MaxCap flexible funding options choosing the right accountant

The advice that an experienced business accountant has to offer your company might just be the difference between success and failure, and their expertise can help guide your decisions as your business grows.

Here are some top tips on searching for the right accountant for your business:

  1. Consider hiring a Firm Versus hiring an Inside Accountant
    Many entrepreneurs who launch their own businesses start out by wearing the accountant’s hat and doing your own taxes, in addition to doing just about everything else in the business, too. It’s become easier for a layperson to keep track of a business’ finance with the advent of simple bookkeeping software, such as QuickBooks and Xero. But there comes a time in a growing enterprise when it makes sense to hand over responsibilities for taxes, accounting, and the rest of the financial functions to specialists.The right accountant can help a business with not only tax returns, but with longer term tax planning, business planning, networking, and even personal tax planning if your still the major shareholder in your business.Before you can find the right accountant, you need to determine if you need an accounting firm or an inside accountant.
  2. Think about when the right time is
    Many small businesses don’t have the volume of financial transactions that necessitate hiring a full-time — or even part-time — bookkeeper or accountant on staff. Then again, the financial situation of their business is such that they could benefit from more regular financial review and planning and up-to-date accounting — instead of leaving every invoice, receipt, and ledger to hand off to the tax preparer at the close of the fiscal year.Hiring an outside accountant or accounting firm on a consulting basis is a good first step for a growing business. The outside firm can often cost less than the salary and benefits of a full-time employee and, at the same time, you may be getting a higher level of advice from eg. a tax accountant.
  3. Do your research
    According to a report by Oxford Economics, there were almost 600,000 people working in accounting roles in 2016 – what does this mean for you? Well, the good news is that you can afford to be picky! The bad news is that with so many to choose from, you’ll need to research thoroughly.Your best resource is to seek recommendations from your professional network, otherwise a valuable place to start is by researching online reviews.
  4. Ensure that they are aligned with your business
    Consider the type of practice that the accountant is running, and whether this will be a good match for your company. For example, if you and your company are tech-forward, you may wish to seek out a similarly tech-driven accountant – such as one who uses cloud accounting software (for example Xero or FreeAgent), or is happy to conduct meetings over video call when needed. On the other hand, if you favour putting pen to paper and meeting face-to-face, a traditional accountant may be more suitable.
  5. Evaluate the fees
    When hiring an accountant, take a look at the specific fees that they charge and how those fees are calculated. Some companies charge a flat rate on a monthly or annual basis. Find out if there are any start-up fees or fees if you close your account. Discuss extra charges for services that aren’t included in the typical workload of the accountantAs a small business, the last thing you want is to receive a hefty unexpected bill after your accountant has spent hours working on your annual accounts preparation. Many practices offer tailored monthly fees to cover all your accounting and taxation needs. If your business is not VAT registered, the quote will take this into consideration. Equally, if your business is incurring thousands of transactions a month, the bookkeeping will be more time-consuming, which may be reflected with higher monthly fees.
  6. Get proof of their licenses and insurance:
    Request a copy of the accountant’s practicing licence and Public Indemnity Insurance. An accountant should never mind presenting these to you, and it’s worth giving yourself a little extra comfort and reassurance.
  7. Assess their expertise
    When hiring an accountant, you need to choose someone with experience in preparing tax returns and financial documentation of companies that are a similar size and revenue to yours. If you can also find one which has worked with businesses in the same sector as you before then that is a massive bonus as they will have a good understanding of your unique needs.When looking at expertise, why not also consider their expertise in using cloud-accountancy software. Are they forward thinking? Technologically savvy?
  8. Get recommendations
    When you start your search, why not ask your family or friends who own a small business first to see if they would recommend their accountant? It is a simple yet potentially effective way to find someone who is tried and tested.It is however important to remember that choosing an accountant is a very personal decision, so what is right for your friend who owns a hairdressing salon might not suit your manufacturing company.Looking online for recommendations is also a possibility, however if you do this please be careful to use trusted websites or business orientated social media networks, for example LinkedIn. If done right, it is a good alternative way to search for accountants who’ve been recommended by others.
  9. Check what software they use
    It is true, accountants often have their own preference when it comes to accounting software. This does then raise the issue of sharing data however with the technology that is in place today it can be worked around with minimal issue. This said, it is good if you can find an accountant who’s using the same software as you.When using a software, try to use market leading accounting software that is easy to use and allows files to be exchanged in a secure and encrypted away. An even better option, which we would recommend is a cloud-based accounting software with encryption built in. By going down this route, you don’t have to worry about the risks involved in exchanging data back and forth.
  10. Ensure they have great references from within your industry
    Look for accountants with great references within your field. Many accountants have chosen specialty industries and advertise this clearly, but some won’t. Instead you’ll have to enquire to find out if they have experience working in your industry. Ask for references or examples of how they’ve worked with businesses like yours.You can also look for companies of a similar size and industry to you and get recommendations from them; assuming they aren’t competitors. Check forums or business sites for tips or warnings about companies. Remember to take everything you read, the good and the bad, with a pinch of salt.Finding an accountant with a deep understanding of your industry will ensure they are better prepared to respond to your businesses needs. For example, an accountant with experience working for businesses in the tech industry might find it a bit more difficult to get to grips with the needs of a boutique ad agency as swiftly as someone who already has experience working for businesses in the advertising field. This isn’t for all accountants but it can make trusting your new accountant that much easier knowing they have relevant experience.
  11. Ensure they have experience of businesses at your size
    It’s also a good idea to find an accountant who has shown through their reference list that they work well with businesses of a similar size to yours, because new/small businesses have very different qualities and needs to those large businesses. Sometimes this means working with smaller accountancy firms who can offer not only a more one-to-one approach to your enquiries but also are in a similar position to you if you are a small business.
  12. Leverage Social Media
    These days most accountants are active on different social media platforms. In fact, having a profile on LinkedIn should be a must for any working accountant or accounting firm. You want to see if they have a profile and if they have any recommendations from customers. That is social proof that they have an active business and are highly recommended for their expertise by at least a few customers.
  13. Ask About their Reporting Frequency
    It is important for you to know how often you will get financial statements from your accountant. Frequent communication is vital between you and your accountant, especially when you are growing your business. You want to use your accountant as a business advisor, not just to get help during tax season. So, set expectation about the frequency of reporting and communication in advance, and choose an accountant who meets your requirements.
  14. Check they provide all the services you might need
    Think about the services you need now, but also in the future as you grow. For example do they provide: Tax, Book-keeping, Payroll, Regular accounting updates (sometimes called ‘management accounts’), Finance administration services (invoicing, paying staff, managing credit control etc), Business mentoring or advisory, Cashflow planning, Business planning, Budgeting
  15. Ensure they have all the qualifications that you might require in your accountant
    The qualifications vary by the type of accountant you need. An accounting clerk must have at least a high school diploma and on-the-job training. An accountant must have a bachelor’s degree in accounting. A CPA must have an accounting degree and additional certifications.Look for an accountant who has a good understanding of tax laws, accounting software and business management. When interviewing an accountant, pay attention to their communication skills and how they explain information to you. Sometimes an accountant will have to decipher documents and information for you, so it’s important that they’re able to communicate clearly.Crunching numbers is important, but the ability to propose cost-cutting solutions is valuable too.

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