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Accountants come in all shapes and sizes, both good and bad. To many people they are a necessary evil but a good accountant can add value to your business and help you sleep at night. But how do you find the right one for you?

The first step is to accept that you need an accountant. If you don’t already know why you need to keep accounts – or even if you think you do – you should read our free guide (no registration required) Accounting and Taxation for Small Businesses and also have a look at Accounts Demystified which will give you an insight of to what you can do yourself.

Having read these and having decided that you do need an accountant for all or some of your accounting or taxation needs, then this article will help you find the best and most cost effective accountant for your specific requirements.

As a business owner you probably see the paperwork side of your enterprise as the least important aspect of the business. There is a great temptation when starting a business to leave all the boring paperwork to one side with the mental promise “to get around to it soon”. You never do.

Most banks like to see a Business Plan before they open an account but unless you are borrowing substantial sums they will usually accept a plan you have written by yourself or using software that they themselves supply. So you could have started your business with no accountancy advice. This is not a good idea. Businesses need accountants and while you might not like it, you should lump it, and if you haven’t lumped it you should start doing so immediately. You’ll only end up with a bigger accountancy mess to sort out, which will in turn end up with higher fees, which may well see you hiring a cheaper and less able accountant. A false economy in fact. Trust me, when I was in general practice I made a lot of money dealing with problems caused by inadequate record keeping.

So what do you want from your accountant?

Taking advice from an accountant when you are starting up in business doesn’t mean you have to sign up to have them do everything for you. Depending on your own knowledge you may feel able to do most of the bookkeeping yourself, or maybe your spouse or a family member can do it for you. If that’s the case you might only want your accountant to prepare and file your annual accounts and tax returns.

Anyway, the first thing to do is make a list of what you want and here’s the sort of list you might come up with if you or a member of your family are going to do the basic bookkeeping yourself:

  • Advice on what records to keep and how to keep them in a way – or using software – that the accountant can easily (and cheaply) use to prepare final accounts;
  • Advice on my legal responsibilities as a sole trader, partner or company director;
  • Regular updates highlighting changes in legislation which might affect my business;
  • Easy contact if I have any general questions;
  • Free answers to those general questions (within reason);
  • Experience dealing with other clients in same sort of business as I am (retail, consultant, on-line, service or whatever);
  • Someone I feel I like and can get on with!

You will see that I don’t mention costs. Obviously this is a concern but it is actually difficult to make much sense of an hourly rate or even a fixed fee service. If one accountant quotes you £60 an hour and another quotes £40 an hour which is the cheaper? Well if the first accountant says it took ten hours to do your accounts and charges £600 but the second accountant says it took 20 hours and charges £800 which is cheaper? Leave aside the possibility that the second guy might not have actually spent 20 hours on the job even if he did, why did he take so long? Isn’t he as good. But there again perhaps the guy who took 10 hours cut corners. See what I mean? It isn’t easy.

Fixed fees can be a help but as a start-up business neither you nor your accountant really know how much time will be needed to do your accounts so they might quote high to cover themselves. Alternatively they might quote low to get the job and then find lots of “extra” services they need to charge for.

I’m not saying that accountants are crooks – just pointing out that it is difficult to deal with the issue of costs for a variety of reasons. Do ask for some sort of price guide but what I would do is use my common sense. A big national practice, say KPMG, is clearly going to charge more than a small local practice. A practice working from a smart high street office is going to be more expensive that one in a side street. Someone working from home is probably going to be the least expensive.

For me the main thing I am looking for in an accountant is to find someone I can relate to, knows my business type, and who I like and feel I can get on with. If we can have a drink and talk rugby together then that’s the one for me. If he wants to take me down the local lodge for a drink, then no thanks. But you may be looking for a different type of person.

All accountants are not created equal

The term “accountant” is generic. There are all sorts of specialisms within the accountancy profession just as there are all sorts of specialist doctors or lawyers.

If you have a broken arm then an ear, nose and throat specialist isn’t going to be much good to you. If you have been arrested for bank robbery then a divorce lawyer may not be the best person to spend your one telephone call on.

Without going into too much detail, and leaving qualifications aside for the moment, there are probably just two types of accountant that you are likely to come across in your search. These are accountants who qualified in business or industry and those who qualified in private practice. They can all do the sums but in my experience those who have come up through the business route usually have more to offer. An accountant who has actually been involved in a business “at the sharp end” has more value, to me at least, than one who qualified by going to university (where they could have taken a degree in almost anything) and then trained in a large training practice – usually in auditing – without getting real experience of business. I want an accountant who tells me what I should do and how to do it, not one who tells me I should have done something differently after I’ve done it.

Qualifications

Some people will tell you that you should only use a member of one of the big Chartered Accountancy bodies of which there are four who offer general accountancy services to the public:

  • Institute of Chartered Accountants in England and Wales (ICAEW)
  • Association of Chartered Certified Accountants (ACCA)
  • The Institute of Chartered Accountants of Scotland (ICAS)
  • Chartered Institute of Management Accountants (CIMA)

In general members of ICAEW and ICAS have mainly qualified in private practice. Most of the ACCA members have qualified via a business route as have virtually all CIMA members.

Then there are other non-Chartered bodies including:

  • The Institute of Financial Accountants
  • The Association of Accounting Technicians
  • Certified Accounting Technician

All of the above are regulated, have to carry professional indemnity insurance, and undertake continuing professional development courses to ensure they are up to date with changes in legislation.

Everything else being equal you should have no concerns about using a member of any of the above bodies. There are other bodies covering bookkeepers and what are called “qualified by experience” accountants – people who have done the job for years but who don’t have a formal qualification, perhaps because they are time-barred (if you don’t take all your exams within a time limit you can never take them) but I personally would take more care dealing with these people to ensure that they have the relevant experience in my particular business type.

How to go about it

The first step is to establish a short-list of at least 3 or 4 potential accountants who you will meet face to face. The relationship with your accountant is generally going to be a long-term one, so it’s worth investing some time in this. It can be a major hassle changing accountants so try to avoid having to do this.

Recommendations and referrals are worth seeking out but make sure that the person making the recommendation is in a similar type or size of business to you and that they won’t be embarrassed or annoyed if you reject their recommendation.

Check out yellow pages, on-line directories, and local advertising and once you have a long-list, make a few phone calls explaining what your business is about and what services you might need. If you’re calling one of the bigger high street firms (roughly, one that has more than four or five partners), establish who your regular point of contact will be. From this, pick out a handful of the best matches and book some meetings.

The meeting – questions, questions

When you meet prospective accountants it is important that you’re realistic about the nature of your business, and your own record. They can’t give you proper advice unless you are open and above board with them.

So if you have a bad credit record or have had business failures come clean up front. They will find out at some point anyway but if you have been honest up front you can make your explanations at that point and give them comfort if they agree to act for you. I know its difficult to give this sort of information to someone who doesn’t yet act for you but it has to be done.

Feel free to ask whatever you like. Ask about their qualifications, how did they qualify, what is their background. Ask about what extra services the accountant can offer – for example, if you’re business is looking to grow, it’s likely you will need to raise finance. Can they help or do they know someone who can? Invariably, you will want to ask them about fees so bear in mind my comments above.

The other thing you should be looking for is for the accountant to be firing questions back at you. This  shows the accountant is getting engaged in your business, which is precisely what you want: someone who will get involved personally and take an interest in your affairs. Some may even ask to see a business plan, which can be a good sign. A good accountant will use this meeting to interview you too.

At the end of the meetings you may well find that one or more of the accountants don’t want to act for you. Don’t take it personally – they may be too busy, they may feel that they don’t have the knowledge or skills that your business needs. They may even refer you to someone else if they feel that their charges are likely to be too high for your business. Yes, I have known that to happen.

But hopefully, at the end of the process you will have identified an accountant you can work with to your mutual benefit.

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9 Responses to “Finding The Right Accountant”

  1. Tina says:

    Great info and I really like the site.

  2. roman brito says:

    i liked your article.

  3. Ernie Quintero says:

    Heh I’m honestly the first comment to your amazing article!

  4. JohnJames says:

    Great information. Thanks. I particularly like how you explain that Chartered accountants may not be the best option for small businesses like mine.

  5. Jon Smith says:

    Very good article.
    I think the key here is the long term relationship that will be built up.
    We at Berley Chartered Accountants (London) believe in acting as Business Advisors to our clients, where the accounts, audit and tax compliance is only a small part of what we do.
    Fixed fees are a great way for clients to be able to plan for what our charges will be – and we always hope to be able to recover at least our fees in company and personal tax savings.
    If anyone would like to know more then please contact me

  6. Val says:

    Thank you for this guide. Lots of good common sense.

  7. Brian says:

    Great post about how to find an accountant. I need a new one and will follow your advice.

  8. David Adams says:

    Very good info on how to choose an accountant for your business. Thanks. Should be required reading for all new and existing business owners. Keep up the good work.

  9. Leo says:

    Great Blog post, Thanks.

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