When starting a new business, you’ll need the best possible support to set up your accounting and manage your finances.
This means finding an accountant that really understands your business needs and that can keep your company financially safe.
(This counts if your business is up and running too and you don’t yet use an accountant.)
In this article, we help you do exactly that by covering:
- How an accountant helps your business
- Difference between an accountant and a bookkeeper
- How to find a good accountant
- How to choose the right accountant
- Final thoughts
- FAQs on finding an accountant
How an accountant helps your business
Accountants take care of your financial admin and provide you with ongoing business guidance.
As experts in all areas of finance, tax, and compliance, they’re uniquely positioned to monitor your company’s finances, warn you of problems before they arise, and reveal opportunities.
To help your business grow, they provide advice on everything from how to run a payroll and create business plans, to forecasting cash flow so you can secure loans or grants.
Luke Streeter, co-founder, accountant and chief operating officer at flinder, explains what you should look for and expect in a good accountant.
He says: “Your accountant should be a business partner. They shouldn’t be somebody you see once a year and you get a set of accounts from.
“A good, modern accountant will want to meet you in person, or jump on a Skype/Zoom call, and not just at the first introduction.
“They’ll actually try to understand you and the business, then advise you what is best when considering the whole picture.”
Accountants proactively use accounting software to keep your business financially healthy and legally above board, while also using data to help you make confident decisions.
This keeps you progressing towards your financial goals, while making it really easy to collaborate together.
Difference between an accountant and a bookkeeper
If you’re trying to find an accountant for the first time, you might be wondering: “What’s the difference between a bookkeeper and an accountant?”
The roles can overlap, but accountants tend to have more of a 360-degree view of business finances and its compliance requirements, as well as its relationship with your overall business goals.
Bookkeepers tend to focus on the more here-and-now financial matters. As the name describes, they aim to keep your financial books in order.
Bookkeepers might visit your business premises periodically to ensure the accounting is up to date. As such, they may use your computer and your accounting software.
As part of their job they might chase unpaid debts, or at least inform you they need chasing. They’ll enter receipts on to the system for your purchases, and generally take care of the burden of ensuring your accounting is correct.
This can include tax preparations, or even managing payroll runs.
Having a bookkeeper has been described as having your own freelance finance person, and many businesses use both a bookkeeper and an accountant.
The accountant will step in at certain times of the year to assist with compliance needs, or adopt more of an advisory role across the year – watching your profit and loss, for example, and warning of problems or pointing out opportunities.
An accountant will probably be required to create reports if you need to apply for financing, or if you need to audit.
How to find a good accountant
When it comes to finding an accountant, getting the right fit is vitally important.
After all, they’ll oversee all your company’s finances, be responsible for keeping everything above board financially, and will play a huge role in the decisions you make.
But there are so many options out there, and because of technology, you aren’t limited to those local to your area.
So, where do you start?
Here’s everything you need to consider.
Gather potential accountants
Start your search using networks, directories, and online portals, such as the ICAEW.
These sites will direct you based on your needs, such as your preference for a member or firm, or any specialism or industry experience you’re looking for.
Get references and check accreditation
When choosing an accountant, it’s always wise to do a background check on those you’re considering and check their accreditation, which you can usually do online.
You could ask the prospective accountant to provide three client references.
It would also be useful to get a recommendation from someone who also works in your industry so you can be sure the accountant has a real understanding of what your business is about.
Create a shortlist of potential accountants
Have a quick introductory chat with a few different accountants, get quotes and make a shortlist.
Establish how they prefer to communicate with their clients and if this fits with your needs, as this is an undervalued but crucial factor in how well you’ll work together.
Is your accountant’s location important?
Technology allows you to work with accountants that aren’t necessarily based in your immediate region.
Of course, you need them to operate within your country so that they have expert knowledge of the regulations you need to meet.
But beyond that, you could hire anyone you feel is the right fit. Just be aware that if you get the most value from in-person meetings, location will be more important.
How to choose the right accountant
Once you’ve trimmed your options down, it’s time to choose which accountant to hire.
Here’s what to consider when figuring out who will be the best fit.
Check your accountant’s costs
Cost will be one of the most significant factors in your search to find an accountant.
The way an accountant works out their charges or fees can potentially save you thousands of pounds.
Always ask for a quote based on workload rather than what your company is making. Some accountants have stopped working on fee basis and instead ask their clients to pay a monthly retainer.
This can represent excellent value for money because it means the accountant is always there, ready to answer a query or undertake work.
Accredited or certified accountants
You’ll also need to decide whether to work with an accredited or certified accountant. Their status is determined by how they are regulated and recognised in your country.
For example, chartered accountants (CAs) have completed a minimum of degree-level study, workplace experience, and a professional competence programme. They are also members of a professional body.
This means they have the knowledge and experience to help you with all aspects of accounting and will be especially useful if you’re looking to secure loans or if you’re audited.
A certified accountant is less qualified than a chartered accountant, but they have still completed an industry recognised course. This means they can deliver straightforward accounting services and help you manage your finances.
Stay in contact with your accountant
This is something you also need to keep up on your end, otherwise your accountant won’t be able to provide you with the best advice.
Keep in touch regularly.
Companies often go into liquidation simply because they haven’t kept their accountant in the loop, and it’s been too late to salvage things after the accountant has stepped in.
By telling them what you want, you’ll ensure they can adapt and evolve to newer ways of working to help you grow your business.
Choose an accountant that provides added value
There are many accountants who go over and above for their clients. Some are happy to recommend accounting software based on your individual needs.
Others like to hold regular networking events and business workshops.
Some will even give you regular reviews of your finances free of charge and make recommendations to ensure you get the best profitability.
When choosing an accountant, pick one that has a real understanding of customer loyalty and retention.
Questions to ask when choosing the right accountant
When you’re ready to start speaking to accountants, the questions you ask are really important. You need to determine how well each accountant could fit your business, which depends on quite a few factors.
- What are some examples of other businesses you serve in this industry?
- What is your preferred way to keep in touch?
- How often do would we have meetings/check-ins?
- How do you charge?
- What services will I get?
- What areas are your specialties?
- How could you help me grow my business?
Keep your records up to date
You’re legally obliged to keep all your tax up to date, so keep a file of all your bank statements and relevant financial documents for six years.
Choosing an accountant is one of the most important decisions you’ll make in the life of your business, and a good accountant really can make all the difference between success and failure.
The days of accountants sitting in dusty offices working out tax bills are long gone.
Nowadays, accountants anticipate being your business partner, and are as focused on your business growth and success as you are.
FAQs on finding an accountant
How do people find accountants?
The simplest way people find accountants for their business is using online networks, directories, and portals.
They also ask for recommendations from other business owners in their industry or region.
What questions should I ask an accountant?
The main questions to ask an accountant are how they charge, what their services cover, their preferred method of keeping in touch, and what relevant experience they have.
Their answers will reveal how well they’re likely to fit your business.
At what point is it worth getting an accountant?
You can hire an accountant at any stage of your business journey.
Whether you’re just starting out or have been managing the finances yourself for a while, an accountant will free your time by taking care of the admin and advising you on vital financial matters.
Editor’s note: This article was first published in July 2017 and has been updated for relevance.