Pin-the-tail-on-the-donkey games are popular with young children and parents alike. Just put on a blindfold, spin around a few times and enjoy as the person struggles to stick a pin into the picture of a donkey that’s missing its tail.
Traditional games like this are definitely my favourite, but, what worries me is when we take this approach to choosing the professionals who handle our personal and business matters.
Take the decision to choose a GP. Most people pick one near their home. And even though the receptionist is always rude to them and they can never get an appointment when they want they never change their GP.
I’m no exception to this. My GP is close to my home and my dentist is the first one that accepted me as an NHS patient.
We take the same approach to choosing an accountant. But while your doctor or dentist has to be qualified and is regulated, your accountant may not be qualified at all.
In fact anyone can call themselves an accountant. It isn’t necessary to have qualifications in the area or any experience. You can wake up one morning and decide, ‘I’ll be an accountant today!’ Yet most people don’t even ask the question.
It is important to make sure that your accountant has qualified through one of the main accountancy bodies such as the Chartered Institute of Management Accountants (CIMA), the Institute of Chartered Accountants (either ICAEW or ICAS) or the Association of Chartered Certified Accountants (ACCA). These bodies hold their members to account in the event of bad practice, and so you’ll be afforded some protection if things go wrong.
So, how can you make the right decision when choosing an accountant? Here are some handy tips which should help you sort the wheat from the chaff:
First things first, try to choose an accountant before you start your business. Your accountant will then be able to help you get the structure of your business right from the start. After all, a decent accountant will want to help you with your business plan as well as help you with tax planning.
If you need an accountant just for your personal accounts, don’t start looking for one two days before the tax return deadline. Give yourself a fighting chance to find a good one before January 31st.
Now, some people will go on personal recommendations. But who’s to say that just because your mate down the pub says his accountant is ‘OK’, that they really are any good or suit your needs?
Accountants differ widely in qualifications, skills, experience, friendliness, and it is crucial that when entering into a business relationship that will, if successful, last the life of your business, you choose carefully.
Look at what your business actually needs from the relationship; if you are a small business and you require a degree of handholding, don’t opt for a practice that specialises in multi-nationals. It is wise to have a list of your ‘must haves’ and look for the accountant that ticks most of your boxes.
The next area to look at is fees. How much does the accountant charge? Do they offer fixed fees? If they’re the old fashioned type then an hourly rate will be the norm and I would suggest you avoid them. Go for fixed fees so that you know what you’re getting and at what price – that way you won’t get a surprise when the bill arrives at the end of the year.
It is important that you actually like your accountancy team; they’ll be advising you on some pretty vital stuff and so you have to be able to a) trust them enough to take their advice and b) feel comfortable enough with them to be completely candid about your finances. So choose people you click with, it is not unprofessional to be somewhat instinctive about your decision.
Also make sure you ask about how responsive they are. If they’re only interested in dealing with you once a year to sort your tax return and annual accounts then say goodbye to them, if that’s not what you want.
A good accountant will want to speak to you regularly and will be happy to see you at your premises at time that are convenient to you, even if that means when you finish work at midnight.
Ask the accountant what happens when they take time off. Some smaller firms are part of a national network of accountants which helps them plug their knowledge gaps as well as ensure they have high quality cover should they fall ill or be away on holiday.
If you’re leaning towards a small accountancy practice, ask yourself what back-up they have if a tricky tax issue crops up. After all, when you go to your GP, you expect them to know a little about most medical ailments and to send you to a specialist if needed.
Choosing an accountant doesn’t have to be pot-luck. Make sure you have a strategy and don’t just pick the first person you come across, after all, not all accountants are created equal!
In summary, when choosing an accountant:
- Confirm that they are qualified and sufficiently experienced to look after your affairs
- Make sure that the accountant has sufficient cover and has access to specialist advisors (just like your GP)
- Look for an accountant who provides a proactive service, working with you throughout the year and not just at year end. This is the only way in which you can be sure that you take advantage of all the tax saving possibilities available to you and your business.
- Always insist on a fixed fee arrangement with your accountant so that you are in control of fees and not open to any nasty surprises when the invoice lands on your desk.
- Finally make sure you choose an accountant you like. This may seem a strange statement but to get the most out of your accountants expertise you need to work closely with them and to do this successful you need some one you trust and are comfortable with.
Three ways to tell you’ve found the right accountant for your business
With so many accountants and accountancy firms out there to choose from, how can you tell whether or not a particular accountant is right for your business? Finding the right accountant is about more than choosing someone you can work with on a personal level, you need to be able to trust that your accountant is proactive and reliable, and therefore, going to be an asset for your business.
Here are three important criteria that will tell you if you’ve found the right accountant for your business.
They have great references from within your industry
Finding an accountant with great recommendations, or good reviews, is as simple as searching for ‘accountant’ on Google. But online reviews and a strong rank position does not necessarily mean you’ll be working with the right accountant for your business. This is particularly important if your business has to comply with specific tax laws which are unique to your industry.
Look for accountants with great references within your field. Many accountants have chosen speciality industries and advertise this clearly, but some won’t. Instead you’ll have to enquire to find out if they have experience working in your industry. Ask for references or examples of how they’ve worked with businesses like yours.
You can also look for companies of a similar size and industry to you and get recommendations from them; assuming they aren’t competitors. Check forums or business sites for tips or warnings about companies. Remember to take everything you read, the good and the bad, with a pinch of salt.
Finding an accountant with a deep understanding of your industry will ensure they are better prepared to respond to your businesses needs. For example, an accountant with experience working for businesses in the tech industry might find it a bit more difficult to get to grips with the needs of a boutique ad agency as swiftly as someone who already has experience working for businesses in the advertising field. This isn’t for all accountants but it can make trusting your new accountant that much easier knowing they have relevant experience.
They have experience of businesses at your size
It’s also a good idea to find an accountant who has shown through their reference list that they work well with businesses of a similar size to yours, because new/small businesses have very different qualities and needs to those large businesses. Sometimes this means working with smaller accountancy firms who can offer not only a more one-to-one approach to your enquiries but also are in a similar position to you if you are a small business. This works vice versa too.
They go the extra mile
According to James Richardson, a company director at the accountancy firm Metric, a good accountant should do more for you than just look after your tax compliance and annual accounts.
For example, the right accountant can help your business raise money by looking for any government funding, tax relief schemes, and grants which your business might be eligible for. They can use their financial expertise to help with crowdfunding, finding new investors, and they can even help you sell your business’s shares if need be.
Richardson told The Guardian that people only tend to ask his firm if they can balance their business’s books, but you should be asking your accountant about what your business is entitled to that you don’t know about. That way you’ll know that your accountant is worth every penny you spend on them.