If you’ve finally decided to take the huge step of becoming an entrepreneur and starting your own business, you may need to start thinking of hiring an accountant. Whether you choose to go for a full-time accountant or enlist the services of a professional accounting firm, choosing your accountant is a crucial milestone for your enterprise.
First and foremost, the right accountant will make sure that your business is compliant with HMRC and Companies House, and also assist you to reduce tax bills, avoid unnecessary penalties and fines as well as help you to grow your business. But, many small businesses do just fine without hiring an accountant to handle their books. The decision to hire a professional accountant solely rest on you and whatever you decide will ultimately affect the survival and success of your business.
If you do opt to hire a professional accountant, how do you know which one to choose? How do you know which professional will work best for you and your business, and where do you even begin your search for a competent and reliable accountant? Well, here are a few steps that should make things a lot easier for you.
Step 1: Establish Your Needs
The first step in finding the right accountant for your small business is to establish your needs. Ideally, you should ask yourself what do you need an accountant for? Is it to consolidate your annual accounts or manage your payroll, or file tax returns or simply manage the books. Whatever it is, you should identify what your business needs and then proceed to look for someone who can best meet these needs.
Step 2: Do Some Due-Diligence
A report by Oxford Economics revealed that were more than 500,000 individuals who practiced as professional accountants in 2016. Why does this statistic matter to you? Well, first and foremost – it tells you that are plenty of professional accountants to choose from which is a good thing. But, because there are so many people to choose from, it can be difficult to find the right professional for your small business.
The best place to start your search is asking for recommendations from trusted colleagues and business associates. You can also use the internet to find recommendations and reviews of different accountants. Once you have identified a couple of candidates for the job, you will need to consider several factors before making a final decision. Here are some of the things you should consider:
# Ensure That They Are Familiar With Your Niche Industry
The best accountant for you is one who’s aligned with your business and niche industry. Look at the specific industry you’re in and check to see if an accountant has experience dealing with other businesses and companies in your niche. For instance, if you are a tech startup, you will want to hire an accountant who is also tech-driven – preferably, they should leverage different types of accounting software like FreeAgent or Xero when working for you. However, if hiring an accountant who is familiar with your industry is not a top priority for you, you can still opt to go with a traditional and all-round accountant.
You also need to establish the specific role your accountant will be filling. Will they be a full-time hands-on accountant who is responsible for the business’s accounts and meeting deadlines or will they be less proactive and take a back seat leaving you to handle some of the major accounting tasks like filing your returns. Ultimately, the decision is yours but you need to communicate your expectations to your preferred accountant so that both of you are on the same page.
# Know Their Rates
Most accountants charge by the hour, but there are those that charge a fixed rate. If you don’t require the services of your accountant on a full-time basis, an hourly rate may be more suitable than a fixed rate.
Being a small business, you don’t want to spend all your spare cash on hiring an accountant to manage your books. Many firms offer special rates that should cover all your taxation and accounting needs. Take a look for accounting company in London. If you are not VAT registered, the accountant will consider this when billing you. If your business processes thousands of transaction every month, the accounting is bound to be more tedious and time-consuming and this will be reflected in the accountant’s bill.
# Get Proof
Ask for a copy of the accountant’s Public Indemnity Insurance as well as their operating licence. A professional accountant will not hesitate to furnish you with these documents, and this should give you some much needed peace of mind.
Step 3: Obtain An Engagement Letter
You need to take additional steps to ensure the safety of your business. On top of protecting your business from cyber threats, scammers and fraudsters, you also need to protect your business in case of conflicts with your accountant. To do this, you’ll need to get an engagement letter from your accountant that include details regarding how to go about any disputes and conflicts that may arise in the course of your working relationship. An engagement letter helps to keep both you and your accountant on the same page.