8 tips for choosing a limited company accountant
It's something many business owners put off or dread doing. Choosing an accountant can be a minefield and yet most small limited company owners say that their accountant is their most trusted advisor.
A great accountant will not only keep your books in order and keep you out of trouble, but also help with tax planning, business growth, cashflow and other valuable areas. Here's our team tips to help you choose the best accountant for you.
How to find the best limited company accountant
1. Research your options
Consider choosing an accountant before you start your business, or as soon as you can, as they will be able to best advise you and support your start up journey. Plus they will help to register with the tax authorities, advise on forming a company and do this on your behalf, register you for Corporation Tax, VAT (plus the correct set up)and set up your payroll if this is applicable. Avoid bog standard services, those that are not reliable and those that charge by the hour!
2. Make sure your accountant is qualified
Most firms are members of a recognised accountancy body such as CIMA (Chartered Institute of Management Accountants , ACCA (Certified Accountants) or ICAEW. A CIMA accountant is commercially focused and is particularly useful for helping small businesses to grow and scale.
3. Use a small limited company specialist
Make sure your accountant has experience of dealing with other small businesses (and is a business owner themselves). If you are a contractor or freelancer, enquire your accountant is very familiar with IR35.
4. Be realistic about costs
Your accountant should not really be seen as a cost - the money they save you and the value they add should more than pay for their fees. Avoid accountants who charge by the hour - ask about an accountancy package that will be better for you as you grow and help you to manage the fees.
You may be moving or getting an accountant part way through the year. Ensure you know what it will cost for the catch up work.
5. Be clear on which services are included
There are a number of core duties all accountants should carry out (such as setting up a payroll, completing your company’s annual accounts if you run a limited company, accounting for VAT, dealing with HMRC, etc.).
Will they also complete your self assessment returns (essential for a sole trader, but if you’re a director, this is a personal cost), provide references for mortgage / letting purposes?
6. Talk to 2-3 accountancy firms
Always contact several firms when choosing an accountant and never go for the cheapest. There's nothing more expensive than a cheap accountant. You should get a feel of what it will be like as a client from your initial dealings with each firm. It is essential that you feel like you can build a good relationship and that you will be well looked after by a named person.
Does your accountant work with a reputable accountancy software such as Xero, Sage or Quickbooks?
This type of software has revolutionised life for both accountants and their clients. It has never been easier to keep your accounts up-to-date and view the status of your payments and tax liabilities 24/7.
If an accountant hasn’t adopted cloud software yet, they are best avoided. Ironically, it has also never been easier to switch accountants, thanks to cloud accounting software.
One final piece of advice is to check out the Google reviews for your potential accountants. You can also ask other small business contacts if they recommend a great accountant.
Purple Accounts has been serving business owners in the Isle of Man since 2007 and is a family run Chartered Management Accountants. Get in touch on 07624 336057 or email firstname.lastname@example.org.