Choosing an accountant is like choosing a new business partner. The right accountant will become a trusted colleague you can depend on, who offers advice and guidance as your small business grows. So what are the top things you need to look out for?
Top tips for choosing an accountant
Once you’ve decided it’s time to hire an accountant, the next step is to choose which accountant to hire.
It’s important to take the time to do this carefully, and there are a few things you’ll want to consider first. You’ll need to think about issues such as the accountant’s location, the division of workload and the type of accounting software you’ll use. Consider how much you’ll have to pay the accountant, and whether they can help to reduce your business taxes.
It’s in your company’s best interests to have an experienced, capable person handling one of the most important areas of your business – your finances. The right person will save you time and money year after year. So here are some things you should consider when you’re choosing an accountant.
Ask yourself if location matters
It used to be important to have your company’s accountant located nearby. But today, more companies are collaborating online, using cloud-based technology to manage their business. This means that location is less of an issue. With cloud accounting, you and your accountant can view identical real-time data at the same time – no matter where you are.
The decision about where to find your accountant really comes down to what suits your company best. Depending on how you want to handle the finances, your accountant could really be based anywhere in the world. For example, if you’re happy to collaborate via email, phone calls, video-conferences, or secure accounting software, then you could be in New York and they could be in London. If your accountant can be anywhere in the world, you don’t need to make compromises based on their location. You can find someone who really understands the specifics of your business or industry.
On the other hand, you may prefer face-to-face contact and find it useful to have someone who’s able to go to business meetings with you. If this is the case, then you’ll need to limit your search to accountants who work nearby or are willing to travel to your premises from time to time.
Wherever they happen to be based, make sure they’re an expert in the tax laws that apply to your business.
Look for an accountant with relevant expertise
You’ll need someone with experience preparing tax returns and financial documents for companies of a similar size and revenue to yours. If your company uses cloud-based software for much of its business, you’ll probably want someone who’s savvy with cloud computing.
It’s even better if they’ve worked with companies in similar market sectors to yours, as that will help them understand the unique needs of your business. You might want to check to see if they have larger clients. If they do, it’s a good sign as you’ll know they should be able to handle your growing needs over time.
You could also ask them for a client list that details each company’s gross revenue and number of employees. Find out how their clients have grown and developed over the years, to get a sense of whether they’ll be able to handle the evolving needs of your company.
Tap into your social networks
When searching for an accountant, the ideal candidate might be right under your nose. Start by asking any friends or family members who own small businesses if they would recommend their accountant. If so, why? And if not, why not? The answers to both questions could prove useful at a later stage, when you come to interview candidates.
Bear in mind that choosing an accountant can be a personal decision, so what’s right for your best friend’s PR business might not suit your manufacturing company. Also take into account differences in business structure. The best accountant for a sole trader might not be the best fit for a company with ten employees.
Get someone who’s proactive about saving you money
Some accountants will do little more than manage your accounts and complete your tax return forms, but the best accountants are more proactive. So before choosing an accountant, ask what they could suggest to save your business money.
For example, what proportion of your operating costs do they think you can offset against tax? If you’re a sole trader or consultant, can you offset a percentage of your phone bill, car costs, maybe even rent or mortgage payments? What are the implications of doing so? The accountant should warn you of any pitfalls. For example, using your home as business premises could result in a tax charge levied on the house when you sell it!
Always bear in mind that in most countries there is a big difference between tax avoidance (usually legal) and tax evasion (usually illegal). You need an accountant who knows the details of tax law so well that they’ll save you money in legal ways, but not one who takes things too far and risks causing your business to operate illegally.
Be very careful about this, because ultimately it’s you, the business owner, who’ll pay the penalty if the law is broken.
Find out what software the accountant uses
Accountants often have their own preferred accounting software. The chances are they’ll have been in business for many years and may have become used to one particular brand of software.
This can be a problem. If your company uses a different type of software there are potentially going to be issues sharing data. Although it might be possible to export and import data in a suitable format, it can be time-consuming and easily lead to errors. There’s also the risk of your highly sensitive financial information being read as you send the data back and forth, because email is about as secure as a postcard.
So try to find an accountant who’s using the same software as you. Or, failing that, one who’s willing to do so. There’s no reason why they can’t use more than one type of accounting software for different clients. That’s especially true if the software is easy to learn.
It’s best if you can agree to use market-leading accounting software that’s easy to use, and only exchange files that have been suitably encrypted. An even better option is to choose collaborative, cloud-based accounting software with encryption built in. This will mean you don’t have to worry about the risks involved in exchanging data back and forth.
Good accountants will help your company grow
If all of this sounds more like a marriage than a business relationship, there’s a good reason for that! Your accountant will become intimately involved with the operation of your company so it’s not a decision to be taken lightly. You will need one you can trust, who has the necessary experience and who will be there when you need them.
Good accountants help companies grow, by managing complex financial work and offering advice on practical business issues. This will be guaranteed to save you money in the short and long term. The best ones will be your partner in all but name – and as long as you choose wisely, you can’t go wrong.
At Amour Accountants, maximising deductions and making sure the tax returns are done correctly is our main priority. We are also constantly looking for ways to improve our clients’ experience by simplifying the processes and making tax return preparation easy.
Our vision is providing superior professional services by easy processes at competitive fees wherever you are.
Contact us today.
The article How to Choose An Accountant first appeared in Xero blog.