To survive and prosper in business, you will need a lot of factors to go right for you. Having a good accountant can be one of these key factors.
How good is your accountant?
If you can answer yes to these questions, then you’re well on the way to getting the best value for money.
Have you got a good relationship with your accountant?
You must feel personally comfortable with your accountant. They should be someone who is going to answer your questions, listens to you and your needs and is reliable.
Do they advise you on business planning and tax planning?
A good accountant should take on the role of general business consultant instead of just preparing tax returns and accounts. They should review your financial information and advise accordingly andshould also be involved with you in planning the development of the business and the potential exit strategy for you. They should call you regularly to discuss how your business is progressing and keep you updated on any changes in legislation that may affect your business.
Have you been specific with your requirements?
You should have agreed who does the basic bookkeeping for your business, VAT returns, payroll, management accounts, budgets, cash flow forecasts etc. Most people in business feel that it makes more sense to spend their time doing what they are good at, and leave the hassle of their accounts and tax to an accountant. However, as your business grows it may well make more sense to spend a bit more on book- keeping, both staff and systems, rather than leaving it all to a much higher charging qualified accountant.
Have you agreed a scale of charges and don’t get any nasty surprises?
You should have agreed both your requirements and how much the work and advice costs. You should not have to pay every time you call them unless you ask for extra work or specific written advice. For the proper services from a good quality qualified accountant you should be paying monthly fees of around £200-£300 upwards depending on your specific requirements as above and the size of your business. This is more than some of the production line unqualified accountants, but worth the money and added value from the personal service. In larger firms, the charges would ne much higher. If you do ask for extras that aren’t standard then expect to pay the hourly rate. At the end of the day, you get what you pay for.
Is your accountant qualified?
This means that they would be a member of an Institute including the word ‘Chartered’. Qualified accountants have undertaken a rigorous course of exams and
practical experience over several years and they are regulated by their Institute. They have to undertake a minimum programme of continuing development each year as well as have professional indemnity insurance. All these factors usually mean they offer the highest standards of service with the maximum protection to the public.
Do you have a single point of contact who deals with your accounts?
You should have a single point of contact who deals with your accounts. This is essentially someone who gets to know your accounts and you. Although this does seem like an obvious thing to expect you may not get this with some firms, where you speak to a different person each time and have to repeat the problems, which can be very frustrating indeed. Make sure you have chosen someone who fits the size of your company. A sole proprietor does not need a large firm to handle their work.
Do you get referrals from your accountant?
Accountants can be a great source of referrals. Accountants can also refer other professionals such as solicitors, bankers, insurance brokers, or independent financial advisers. An accountant may have one client who is seeking financing and another who is looking for a good investment and put the two together. They may even refer customers!
If you are planning to start a new business or want to change accountants, the points above should give you the questions to ask prospective accountants. So how do you choose a good accountant?
- Make a list of personal recommendations from your independent financial adviser, banker, solicitor, or fellow business people;
- Call and ask the accountants about their services, qualification, size of firm and their billing rates and policies and their experience in your industry;
- Shortlist 3 qualified accountants that replied promptly, have fees that meet your budget and make sure they are a member of a ‘Chartered’ Institute – there are three;
- Meet with them and ask who will work on your account, whether it will be an employee. Check that they can prepare business plans, accounts, tax returns, budgets, cash flow forecasts and give general business advice. Check that they will agree fees in advance in writing for what you want and be specific about your requirements;
- You could give the shortlist your latest accounts and ask them for their comments based on their analysis of the figures. You will quickly see if they have grasped the basics of your financial position;
- Choose the accountant based on the best answers to your questions and most importantly on how you got on with them. Are they approachable and professional? A good personal relationship can be invaluable. Make sure that they will have time for you and ideally they will be a similar size to you rather than a large firm where the service may not be personal and the charges expensive; and
- Finally, your accountant should not only have an expertise in number crunching but also in business planning and consulting.
A good accountant will add value to your business but if not, you’re going to have a much harder time achieving your goals.