Working with an accountant can be a daunting experience, especially if you don’t feel like numbers are your strong point. In this article, KashFlow advise on how you can get the most out of your working relationship with your accountant.
Start on the right foot by identifying what you need from your accountant
Accountants can help your small business in a number of ways, including:
Preparing annual accounts
Advising on generally accepted accounting principles (GAAP)
Dealing with tax returns, including corporate and individual tax as well as VAT
Helping you prepare financial budgets
Giving advice on investments, loans and funding options
Working with banks on your behalf
Offering other business and personal financial advice, like retirement planning
Once you’ve identified what you need from an accountant, your next step is to find one that specialises in this field and can therefore offer you the most useful advice.
From this shortlist, choose an accountant that truly understands what you hope to achieve with your business. Whichever accountant you decide to hire, make sure they’re a certified or chartered accountant.
Remember that accountants are usually at their busiest around tax return times. Therefore, it’s important to find and hire an accountant before this peak time.
Make sure you’re a right fit
You wouldn’t choose a business partner, or hire a new employee, without running background checks and getting to know them first. Similarly, you shouldn’t hire an accountant without screening them beforehand.
Don’t choose an accountant just because they offer the lowest fee. Instead, look for an accountant with the skills and resources your business needs and find the right match. If possible, look for an expert in the tax laws that apply to your business.
If you’re on a budget, search for accountants that offer fixed-price services or value-based prices that could provide a better financial fit.
Ultimately though, one of the most important things is that you choose an accountant you like and trust, as you’ll have to work closely with them on potentially sensitive financial matters.
Work out what how much work you want your accountant to take on
Accountants often charge hourly, so having them handle every aspect of your bookkeeping and accounting probably won’t prove cost-effective for a small business.
If possible, you should handle the day-to-day bookkeeping yourself. Doing so gives you the added advantage of better understanding your business’s performance and health, which can prove useful if you start looking for investors or buyers.
If accounts aren’t your strong point, adopt an accounting software like KashFlow. By streamlining the data-entry and automatically completing most of the complex calculations for you, accounting software keeps your books easy to manage.
At KashFlow, we’ve integrated our software into the IRIS accountancy platform used by numbers of accountants in the UK. This gives your accountant a complete picture of your business, in real time, increasing efficiency and collaboration for both of you, and streamlining the year-end process.
With your day-to-day accounting and bookkeeping in hand, you can then ask your accountant for guidance on handling more advanced tasks like bank reconciliation and filing tax returns, should you need it. They may also be able to offer a financial perspective on business decisions like hiring and changing business premises.
When deciding on what to delegate to your accountant, focus on what they can do to improve your business’s health.
Work together throughout the year
Even though you’re keeping your own books on a day-to-day basis, it’s important to check in with your accountant throughout the year.
Doing so helps keep them up to date with the shape of your business. During a check-in, your accountant may be able to spot any potential errors or wrong-turns early enough for you to rectify them.
They can also keep you up to date with relevant changes in laws and best practices. This’ll help make sure you’re compliant and that you’re best preparing for both your end-of-year tax returns and longer business goals.
Don’t be afraid to ask your accountant for advice when you need it. If you’re struggling with VAT rules and regulations, then ask your accountant. And don’t be afraid to ask for clarification or extra details if you don’t fully understand what’s being said. Your accountant is there to help.
Finally, check whether you need to let your accountant know of changes to your personal or business circumstances. This could be, for example, that your business plan changes to reflect a change in income or business objectives.
If you’re using cloud accounting software, you and your accountant can view the same real-time data even if you’re in different location. This makes it quicker and easier to share data.
The more access they have to your books, the better they’ll be able to advise you. And don’t forget that an accountant can work on more than just tax-returns. They’ll be able to advise on how your company spends money, the income versus expenditure of different functions and departments and much more.
Keep your records organised
Whether your catch-ups are monthly, quarterly, or less regular – you’ll need to keep your records organised.
The key to doing this successfully is understanding what kind of information they will need. This will cut down the amount of time they’ll need to spend analysing your accounts and making necessary changes, which will in turn reduce the number of hours you’ll be billed for.
As mentioned above, asking for clarification when you don’t understand can massively improve your relationship with them. This extends to keeping your own financial records too. By understanding what your accountant needs, what they’ll be using it for and why, you’ll keep clearer and more useful books.
It’s important to ‘speak the same language’ as your accountant and align your goals. If the simply speak in numbers and averages, ask them to explain it to you in terms of business performance and growth so that you that you can walk away with actionable points and a clearer view of what to do next.
By following these five easy steps, you’ll be sure to create a solid working relationship.