Choose the Right Accountant for Your Small Business

Choosing the right accountant for your small business can make managing your finances much easier. The right accountant gets your business, does the work you actually need, explains things in plain English and gives you a fee you can understand. Qualifications and experience matter, but so does whether you’d feel happy ringing them with a question. Here’s how to compare your options.

How Do I Choose the Right Accountant For My Small Business?

Start with experience. A sole trader working from a van has very different needs from a limited company with a team, so ask whether they already work with businesses like yours.

It also helps if they understand your industry. They’ll know how you get paid, what you typically spend money on and where the pressure points are, so you won’t be explaining the basics every time.

Make sure they know the rules that apply to you too. Depending on your business, that could mean Self Assessment, Corporation Tax, VAT, payroll or Making Tax Digital.

Then there’s the matter of qualifications. The title “accountant” isn’t protected by UK law, so it’s worth asking any accountant you’re considering whether they belong to a recognised professional body, and which one. You can check their membership by contacting the organisation directly.

Finally, look for someone who gives you proactive advice. Preparing your accounts is the basic job. A good accountant will also flag tax planning, cash flow issues and upcoming changes before you’ve had to ask. For more guidance on hiring an accountant, see ICAEW’s small business guide to hiring an accountant.

What Questions Should I Ask Before Choosing an Accountant?

It helps to go into that first conversation with a few questions ready:

• What’s included in your fees, and what costs extra?
• Do you work with businesses like mine?
• Will I have one person I deal with regularly?
• How often will we speak, and how quickly do you reply?
• Do you offer tax planning or business advice?
• Which accounting software do you work with?
• Are your fees fixed or hourly?
• Are you a member of a professional body, and which one?

Pay attention to how they answer, not just what they say. Clear, relaxed answers are a good sign.

Fixed Fee vs Hourly Accounting – Which is Better?

With a fixed fee, you agree a price for a set list of work, usually monthly or yearly. You know what’s coming, so budgeting is easier.

With hourly charging, you pay for the time spent. That can suit one-off jobs or work that’s hard to predict, but your final bill can be harder to pin down.

Plenty of small business owners prefer fixed fees because there are fewer nasty surprises, and you may feel happier picking up the phone without wondering if the meter is running. But neither option is automatically better. Costs vary depending on your business and what you need, so compare like with like and ask exactly what’s covered.

What are the Red Flags When Choosing an Accountant?

Be cautious if you notice any of these:

• Fees that are unclear or keep changing. If you can’t work out what you’ll pay, ask again.
• Slow or patchy replies. If they’re hard to get hold of before you’ve signed up, it rarely improves afterwards.
• No interest in your business. If they don’t ask what you do or how you work, they may not be the right fit.
• Promises that sound too good to be true. Nobody can guarantee tax savings without seeing your figures.
• Only available at year end. You want someone you can reach when a decision can’t wait.
• Vague answers about qualifications. Anyone you hire should be happy to explain which professional body, if any, they belong to.

One of these on its own doesn’t mean you should walk away, but a few together are worth taking seriously.

How Can I Choose the Right Accountant for My Small Business?

Here’s a simple checklist to use when you’re comparing:

1. Write down what you need, whether that’s bookkeeping, VAT, payroll, accounts, tax returns or ongoing advice.
2. Ask other business owners in your trade or sector who they’d recommend.
3. Ask which professional body they belong to, and check with that organisation.
4. Get a clear written quote showing what’s included.
5. Find out who your day-to-day contact would be.
6. Check they’re happy working with your accounting software, or can suggest something suitable.
7. Ask how often they’ll be in touch and whether they offer proactive advice.
8. Ask for references from similar businesses if you’d like extra reassurance.
9. Notice how the first call feels. Did you understand them, and did they listen?

Speaking to two or three firms usually makes the best fit obvious. At Magnum Accountancy, we’re always happy to talk through what you need before you commit to anything.

Book a free call with Daxa at Magnum Accountancy.