How to Choose an Accountant
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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. 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. In many countries, accountants are regulated by professional bodies which look after accounting qualifications and try to maintain high professional standards.
Chartered Accountants CAs are highly qualified professionals who have completed degree-level study along with workplace experience and a professional competence programme. Given the greater experience and knowledge that a certified or chartered accountant has, they'll be able to add value to your business right from the start. And if you expect your company to grow, it's a good idea to hire a professional accountant at the beginning rather than later on. Of course, it is possible to use accountants who aren't certified, chartered or registered, but it might an unwise business move.
Tasks such as bookkeeping, tax preparation and general financial management might not require a certified or chartered accountant. You might want to check to see if they have larger clients. Small businesses are the lifeblood of many countries' economies.
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Because of this, governments like to encourage their growth. As a small business owner, take advantage of networks of business advisors available to help you make decisions like choosing the right accountant. There are often voluntary organisations and local chambers of commerce willing to advise you too.
Make use of these, as they are there to help you and their advice is usually free. They can also be useful places in which to network and talk to other business owners. Do this a few times, and you may find an accountant is recommended to you by other business owners. If nothing else, this could help you cut down the list of possible people to interview. 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.
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. Although Facebook might not be the best place to post a request for accountant recommendations though it's not the worst, either , more business-oriented networks could be useful.
Use LinkedIn or other online networks to delve a little deeper into each candidate's background and find out things like:. Accountants can handle every aspect of bookkeeping and small business accounting.
In most cases, you can bundle up your bills and invoices, hand them all over, and they can do the rest. But this might not always be the best approach.
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Accountants often charge by the hour, so making them do simple data-entry tasks is not the best use of their time — time that you're paying for. So take charge and get more involved in the accounting process if you can. This will give you a better grasp of expenses and revenues in real time and a heads-up on potential problems.
For example, you might choose to enter the basic accounts data in-house, then hand the work over to your accountant. Then they can handle the more involved tasks such as bank account reconciliation, filling out tax return forms, payroll and capital depreciation calculations. Good quality accounting software will make it easy for you to take part in your accounting process. It will simplify tasks like invoicing, automatically sending the invoice and recording its contents at the same time.
And if the accounting software is cloud-based, you can then give your accountant secure access to your accounts with the click of a button. 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?
Do you need to hire an accountant for your small business but not sure about how to choose the right one? Find out the top things to look for. Choosing the right accountant is one of the most important decisions a small business can make. A good one can save you time and help your.
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. 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.
Ask yourself if location matters
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. 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.
How to choose the right accountant
This will mean you don't have to worry about the risks involved in exchanging data back and forth. As with anything else in life, don't automatically accept the first offer you receive. Arrange things in such a way that you can compare a selection of accountants with each other. Then it will be easier to determine which one is best for your business. An interview can be a powerful way to see how well you're likely to be able to work with a person.
And a series of interviews will not only help you better define the type of accountant you need, but also gain you valuable free advice. Here are five simple factors that you can use to select the right accountant for your small business. You can benefit greatly by having an accountant with significant business, tax and accounting knowledge to advise you on ongoing business matters. In most cases, choosing a qualified accountant with a strong financial background, qualifications, such as an account with a CPA Chartered Professional Accountant designation, and experience would be an ideal option for a small business owner looking to grow and succeed.
A CPA has an undergraduate degree, and has met the exam and experience requirements for state certification. There may be different rates for different accounting functions depending on the level of complexity and who in the accountant's firm is actually performing the tasks. Are they forward thinking? At a larger firm, the person you initially meet or speak to on the phone might not be the person actually handling the work, he also reminds. Do I need an accountant when setting up a business?
Before you make a decision to engage a new accountant, make sure you can see yourself working with this individual for many years to come. Changing accountants can be difficult and will result in an unnecessary distraction from your ongoing business activities. Having your accountant react to your queries in a reasonable amount of time will only be beneficial for your business. We all love to make the most of our budget. However, be very careful about choosing your accountant based on price.
The money you spend on good accounting and tax advice is an investment in your business and future success. Sometimes, even with proper planning and due diligence, you may choose someone that is simply not a good fit. While it can be uncomfortable to have this discussing with your accountant, the long-term benefits of having the right team for your business is worth the short-term discomfort of having to part ways with an employee.
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