How to Choose an Accountant for Your Small Business?

  • today 02 Mar 2021
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Choosing an accountant is a crucial decision whether you are going to take a leap towards an entrepreneurial lifestyle or have an established business.

An Accountant comes with unlimited benefits, and helps you manage your finances more effectively, saves you on tax bills, keeps you compliant with applicable tax and other laws, avoid unnecessary fines and late penalties.

But the confusing and time-consuming task here is that choosing the right small business accountant for your business and industry.

Well, read on this guide to make this task simple for you,

This blog post is divided into the following sections

Choosing an accountant step by step

Step 1 – Gather up your business & industry needs

Get a clear idea about the services you want from your accountant.

You can simply hire an accountant to do your annual accounts or to manage everything from bookkeeping, payroll to VAT returns and management accounts.

Hire an accountant in respect of your business circumstances and the time, money and energy you consider necessary to commit.

Step 2 –Use your own connections & do your research

Asking for referrals from your colleagues or friends is a useful trick to reach out to the professional. It is one of the oldest ways to find a professional service provider; however, this has few benefits but many inherent problems:

  1. Not experienced in your industry
  2. Not tech-savvy
  3. Don't provide all services you need
  4. Just not for your business
  5. You are never sure of the price

You can also do this online by simply browsing "small business accountants near me" or using Experlu.

Don't just go with the first result pop up on the Google search. Often the top 4 results are paid advertisements.

You have to look into practices that which accountant's services align with yours and who can understand the challenges that your small business can face.

Step 3 - Make a List of selected accountants & have a chat

  • Shortlist 2-3 accountants: After going through the experience, qualifications, and reviews of all the accountants, select two to three accountants for further process.
  • Introductory chat: Introductory chat should cover the following questions at a minimum:
    • industry experience
    • qualification in brief
    • Fees- don't be shy about asking fees and how it's determined. Many accountants offer tailored monthly fees which cover all your accounting and tax needs. Ask for a breakdown of fees, so in future, you can add or remove individual services.
    • Services- do they provide all the services you need now? What about services you don't need currently but will require in the next year or so? Hiring an accountant or bookkeeper is a long term
    • Professional indemnity insurance
    • Do they have a team?
    • Who will be your day to day contact?
    • Are they familiar with the accounting software you use?
    • What is the minimum contract?
    • What freebies are included, if any
    • Location
    • Are they tech-savvy?
    • Why should you hire them and not anyone else?

Step 4 – Choose one & get an engagement letter

Sit down and go over the qualifications and experience of accountants you have shortlisted.

Weigh all the ins and outs and decide who would be the best one to hire.

After interviewing and comparing accountants, you can now be able to select one for your business.

Though, even with proper planning and due diligence, you may end up with an accountant who is simply not a good fit for your particular business.

So, select an accountant by keeping long term benefits in your mind rather than based on any initial introductory price.

Now get an engagement letter issued by your selected accountant, and take time to read through it before signing. Any special terms you have agreed over the phone or email, make sure these are covered in the engagement letter.

Step 5 – Stay in touch with your accountant

Keep in touch with your accountant to get the best advice from them.

A good accountant will do much more than simply keeping an eye on your accounts and making sure annual you are compliant with tax.

An accountant will have their ear to the ground and will help you find ways to maximize your income and raise capital.

Staying in touch with your accountant will also benefit you while finding investments, selling shares and finding grants.

In short, don't choose an accountant as a pot luck. Always make a strategy and follow it but don't just pick the first suggestion you come across.

Here's the checklist to follow while hiring an accountant,

  • Confirm that their qualifications and experience are suitable to look after your business
  • Make sure that an accountant you are going to work with provides proactive services and work with you throughout the year.
  • Insist on a fixed price agreement to avoid surprises when the invoice lands on your desk
  • Finally, select an accountant you are comfortable with.

Do small businesses need an accountant?

Well, the answer is a huge Yes! And also, No!

There is no legal requirement to hire an accountant for your small business, although there are multiple benefits of doing so.

Although the majority of small businesses working with an accountant credit higher success.

So, you can definitely run a business without an accountant, but you should consider all of the other benefits you can gain by joining the vast majority of the business tribe who partner with an accountant – and reap the rewards.

When to Hire a Small Business Accountant?

Deciding on when to hire a small business accountant can be difficult but often a smart question!

Because an accountant lets you focus on your business activities without freaking out about books and finances.

Let's see when you can hire an accountant for a small business,

  • When starting your small business
  • When you need business advice
  • When filling your tax returns
  • When planning for future
  • When buying or selling a business or assets
  • When applying for a loan

It's a fact that accountants can add massive value to your business.

  • So having an accountant at the very beginning of your small business does make sense; else, you can hire one as per your needs. The benefit of hiring an accountant before incorporating aa business are:
  • Right legal structure
  • Assuming it is a limited company, the current shareholding structure
  • Most accountants provide registered office service, so you get all under one roof
  • PAYE, VAT, and all other registrations are well planned and done as and when required
  • The advice in the selection of the right accounting software
  • Correctly setting up the software, including a chart of accounts and tracking categories
  • Optimized profit extraction from the business
  • Tax planning at the core from the beginning

For tax tips, visit our blog posts tips for starting year-end tax planning.

What are the benefits of hiring a small business accountant?

Help you devise a business plan

When starting your small business, it's important to have a business plan in place.

You will have a financial expert by your side who can record all the financial area of the business.

Devising a financial plan and structure for starting your small business is not only about crunching the numbers, but it requires additional attention.

An accountant will help you note down all the financial details and create an accurate business plan.

Save time and money

While running a small business, you have to give your time to the important day to day operations in order to boost profit and revenue.

An accountant by your side will take all the accounting hassle from you and help you avoid penalties for late tax filling.

Manage accounting tasks

Even minor accounting mistakes can cost you thousands of pounds in revenue.

An accountant can manage complex tasks and will give you confidence that your accounts are on top and no mistakes will be made.

Manage your taxes

When it comes to managing taxes, an accountant can handle it in the most tax-efficient with keeping you up to date with tax law for your small business.

Accountants help you verify compliance that is needed to dispel any taxation problems and errors you could have encountered.

In addition, an accountant on hand can help you slash the tax bill and save thousands of pounds which you can reinvest in your business.

Help you, business grow

With a sound knowledge of finance, an accountant can help you in making decisions that can expand your business.

An accountant will help you pinpoint and solve the problem before they get even worse and eat up your finance.

Takes your stress out

Running a small business becomes horrible, especially when accounts and paperwork seem alien to you!

An accountant can look after these daunting accounting tasks and will put you at ease, rather than having to slog over books.

Let's sum it up

Staying in control of finance can be challenging if you don't have the expertise behind you.

That's why choosing the best accountant can bring many benefits and help your business thrive.

Simply put, deciding to pay an accountant to look after your finance could be the best decision you've ever made for your small business.

Okay! Let's find you a perfect Accountant, Tax advisor or a Bookkeeper

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About author

Sophia

Sophia is a full-time financial writer at experlu. she is a passionate blogger and love to share her knowledge on various subject. Content created by Experlu– are loved, shared & can be found all over the internet on high authority platforms.