How to choose the best accountant for your small business

Hiring an accountant is an important decision for any company owner, whether you’re a seasoned entrepreneur or just starting a business. When you’re deciding to bring one on board, here are some steps you can follow to make sure you get the right one for your specific needs.

Read on to find out: 

• Financial tasks you can hand over to an accountant
• Questions to ask before choosing an accountant
• Other factors to consider: location and more

If you’re a director of a company, it’s not a legal requirement to hire an accountant. In practice, many businesses outsource accounting to save valuable time. Some use an accountancy firm for all aspects of their financial management as well as end of year statutory accounts. Other business owners will take care of the day-to-day admin themselves and use an accountant to organise and file annual returns.

As well as submitting company accounts and tax returns, an accountant can advise on tax matters, submit VAT returns and directors’ personal returns where necessary, organise the payroll, make sure you meet HMRC deadlines and help you to run your business in a more profitable way. Bookkeeping duties aren’t generally part of their remit for small business accounting, but many provide them as an add-on service for an extra fee.

Most accountancy practices will be happy to answer your questions or offer a free consultation before you sign up. Here are some useful questions to ask:

Accountancy fees vary from firm to firm with some sending a bill once a year after completing the statutory accounts and tax return. Others will allow you to pay monthly. While it’s hard to put an exact price on costs, one-off fees for small businesses and sole traders can be anywhere between £300 and £1200 for annual accounts. You’ll need to check which services are included for the price — services like bookkeeping and payroll might be extra.

Talk to the accountant about what software to use to streamline your books. Accounting software for small businesses, like Countingup, can be hugely beneficial even if you employ an accountant, and more cost-effective than engaging a practice to do all of the day-to-day admin. Countingup provides you with a business account, reconciliation and tax filing software in one simple app, which your accountant can connect to directly to receive real-time updates. 

Check how much support you’ll get. Even if you’re using software to do the daily admin yourself, you might still want to get in touch from time to time for clarification from your accountant. 

MTD is the Government’s proposal to keep all tax records online with digital tax filing. Businesses turning over more than the VAT threshold of £85,0000 a year already need to comply with this new law. From April 2022, all VAT-registered businesses need to comply — filing returns quarterly instead of annually and keeping digital records rather than paper ones. Eventually, all businesses whether VAT-registered or not, will have to join.

Running a small business takes a lot of effort and many hours of work but your accountant can make it easier to keep on top of admin by sending you reminders when your tax is due.

Chartered accountants are accountants who have undertaken extra exams and specialised work experience to become members of professional bodies. They are highly qualified professionals who can bring a wealth of experience to your business. You don’t need to use a chartered accountant for general financial management but if your business grows, they can provide an extra level of expertise. 

If location is important to you, then hiring an accountant close to your business will be high on the priority list. Remember that with cloud-based accounting software readily available, you could hire an accountant in Edinburgh while you do business on Brighton seafront. As long as your chosen accountant understands your business, the specifics of your country, industry, and you don’t mind video calls and email chats, you could potentially hire an accountant anywhere in the world. 

Make use of your social or business networks for recommendations. You may have plenty of family members or friends who can recommend someone for the job. It’s even better if they know an accountant who has worked with businesses similar to yours. Try posting on LinkedIn for recommendations from other business professionals — just remember that what is good for another person’s business might not be right for yours.

Figure out how much work you want the accountant to do. An accountant can handle almost every aspect of bookkeeping but that will usually come at a price. You can save money and hours of bookkeeping admin by using an app like Countingup, that automates bookkeeping admin and nudges you to scan and record receipts instantly when you make payments.

The best accountants aren’t only ones that manage your books, they proactively look for ways to save you money. Make sure you choose one who will offer up suggestions to cut costs, increase margins and be as tax efficient as possible. 

It comes down to personal preference but choosing the best accountant and the right software will create the ideal environment for your business to grow and thrive.

Countingup is the all in one business current account with free built-in accounting software. It automates bookkeeping and simplifies tax returns for over 34,000 business owners across the UK. Find out more here