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How do I choose the right accountant for my business?

If you are a business owner or self-employed individual, it can be difficult to handle the complex world of finances alone. There isn’t a perfect accountant for everyone, so finding the right one isn’t easy. Depending on the sector you operate in, the services you need from them, their qualifications, and your budget, you can make a smart decision. Here’s a beginner’s guide to choose the right accountant for my business for you as a small business or freelancer.

Is an accountant necessary for me?

An accountant can serve as one’s guardian angel when one owns a small business, freelances, or contracts. Shortly put, their know-how in numbers will allow you to keep track of the money coming in and going out and keep you from getting into trouble with government regulators such as HMRC.

You’ll get assistance with complex financial matters like invoicing, tax liabilities based on your legal status (e.g. sole proprietorship or limited company), tax-deductible expenses, and end-of-year reporting. In addition, accountants can help you secure funding for your business, conduct audits, assist with mergers and acquisitions, and assist with the purchase or sale of a business.

Accountants have different areas of specialization, which may include a variety of services or sectors. For this reason, it is crucial to find one with previous experience and a current focus on areas relevant to your industry. In our previous article, we discussed how accounting can help your business.

The difference between chartered and non-chartered accountants. 

Accounting is not a protected title, so anyone who has a good command of numbers can work as an accountant. Although they usually have a formal education through a company such as AAT or practical experience within a finance department, they are bound by the FRC’s Corporate Governance and Stewardship Codes.

The process of becoming a chartered accountant entails passing exams, gaining industry experience, and being a member of a recognized industry body (such as the ICAEW or the ACCA). In addition, they are required to carry professional indemnity insurance and to abide by strict ethical guidelines.

Simple matters, such as invoicing and basic tax questions, don’t always require the services of a chartered accountant. However, complex matters, such as preemptive tax planning ahead of passing on your business to your children, maybe better handled by someone with more experience and qualifications.

Find out more about the difference between chartered and non-chartered accountants here.

The best way to choose an accountant

When searching to choose the right accountant for my business, you will need to consider several factors:

1. Does my accountant need to provide any services?

According to their specialization, accountants can provide a range of services, including:

  • Efficiency and compliance with tax laws
  • Enhancing cash flow
  • Establishing your business
  • And help you to register with Companies House
  • Handling tasks like invoicing can reduce your workload
  • When it comes to bookkeeping and financial reporting
  • Reporting
  • Regulating
  • Investing in growth
  • Management of growth
  • Monitoring
  • When buying or selling a business
  • Advice for business owners

All services are not necessary for every business. At first, sole traders and one-person limited companies may only need basic financial guidance, such as help with reporting and registration. Regardless of growth ambitions, it’s still worthwhile to understand the capabilities of your accountant.

2. Place of business

When you’re the sort of person who likes to talk about your finances over coffee, find an accountant who’s located nearby. By using tools, you can narrow down your options by location and connect with accountants in your area. Even if you’re fine with consulting with them virtually, you should consider working with an choose the right accountant for my business who’s based in the same country as you pay taxes. This way, they have an in-depth understanding of the dos and don’ts.

3. Specialization in a particular sector

In some sectors, there might be additional reporting requirements or specific tax rules, so it’s essential to choose the right accountant for my business who understands what these rules mean for your business. It’s still beneficial to work with an accountant who has experience in your industry, even if that’s not the case.

As two very different examples, let’s look at an electrician and a graphic designer.

Some electricians do not invoice their clients. Instead, they ask for payment on the day the work is completed. In addition, they may accept cash payments, which means there is no paper trail they can trace back to if they forget to record income. As a result of their scope of work, they may also carry out a greater number of lower value jobs, which could make tracking their finances difficult without someone keeping an eye on them.

As a contractor, however, a graphic designer works with agencies and other third parties, billing them once a project is completed or monthly if they are acting as a contractor. Therefore, they will need to deal with PO numbers, ensure clients pay on time, and, if their income is less predictable, they may need budgeting assistance to manage their money effectively.

4. Financial plan

Working with skilled professionals can be challenging for small businesses or freelancers due to budget restrictions. The importance of choose the right accountant for my business when your business is still in its infancy cannot be overstated. If you make an error on your self-assessment tax return, even if it is careless rather than malicious, you could end up owing 30% more tax.

choose the right accountant for my business you can trust becomes even more important when you have employees. It is one thing to make an error that delays a supplier’s payment, but if your payroll system goes down and your employees can’t pay their rent or bills, it is another story altogether.

Is it a good idea to rely on personal recommendations?

A personal recommendation from friends, family, or fellow self-employed people in your personal or professional network can be very helpful. They may be able to accept you as a client if they trust their choose the right accountant for my business with something as important as their finances. Having a friend or family member you know and trust have dealt with them first-hand gives you peace of mind. Even if they’re not the right fit for you, they might be able to refer you to one of their colleagues or colleagues who specialize in a different field or service.

Is accounting software necessary?

Small business owners, sole traders, and freelancers often have tight budgets, which makes self-reporting through accounting software an appealing method of managing finances. Nevertheless, it’s worthwhile to consult with an choose the right accountant for my business directly, even if you can only do so infrequently, such as once a year. Their expertise can help you with complex tax questions, such as those related to the recent changes to IR35 regulations, as well as other topics that are too nuanced for a computer program.

A guide to finding the right accountant

Do you have trouble choose the right accountant for my business who can meet your needs? You can narrow down the right person to whip your business’s finances into shape with a variety of tools.

Interested in becoming an accountant? Check out our article on what it takes to become one!

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