How to find the best accountant for your small business

Picking the right accountant for your small business is not a decision that should be taken lightly. And with so many options out there, how can you know that you’re making the best choice?

It takes quite a bit of shopping around to be confident you’ve landed an accountant that can save you time and help your business grow. When it comes to selecting the perfect associate you need a structured approach in defining your requirements before you can commit to an ongoing working relationship. Before you even set up your business, talking to an accountant might be a good idea.

Why do I need an accountant as a small business owner?

While the decision to hire an account is a personal one, there are many ways in which the right one can benefit your business. From drawing up a business plan to suggesting a working structure and ensuring payroll process compliance with government requirements – these are just some of the areas in which you can rely on their professional expertise. Some small businesses that have just started may find that hiring a bookkeeper makes more financial sense for the time being.

Pro tip: If you are not working with an accountant or bookkeeper at the moment, try to calculate how much time you could save by having someone else manage your accounts and what you could achieve in that spare time you will have. This will help you to weigh up the advantages of hiring a professional at that particular stage in the growth of your business.

What’s difference between an accountant and a bookkeeper?

Up to a certain level of turnover, working with an accountant and a bookkeeper will produce similar results, although once your company starts growing you will need the services of an accountant to stay on top of your business’ books and payroll — not to mention keeping your records and receipts in order. What’s even more, an accountant can recommend a different types of software to suit your individual business needs and streamline your financial operations.

In many ways, hiring an accountant is even more important than hiring a regular member of staff. They’ll be overseeing and regulating your company’s finances, giving them a very important role in the life of your business. Therefore, take your time with research. It is recommended that you meet with a least three candidates before making a final choice. The first thing you need to decide is how much of the work you feel comfortable doing yourself.

Can you afford to keep your finances in order and find the time to run your business? Will you be able to do so without any miscalculations and fines?

Pro tip: Try to specify exactly what your business needs before deciding to hire an individual or firm. Speak to accountants and bookkeepers while creating a list of the different services they can offer you. If you think you can do some of this work yourself, you’ll have a clearer idea of whether you need a full-service firm or an on-hand individual.

Where can I find an accountant?

Once you’ve determined what you need, you can find an accountant in the following places:
1. Scout the local ads for small accountancy firms
2. Turn to the Association of Chartered Certified Accountants in your area
3. Browse online forums for advice
4. Rely on word-of-mouth recommendations from business partners and clients

Speak to others in your specific industry to get second opinions about an accountant’s reputation and get feedback from their current to give you a good idea of whether or not they are worth their fees.

Pro tip: Word of mouth is the best option here. Try approaching your business association and ask them to recommend a firm with experience in your industry.

Is location important?

Depending on the nature and location of your business, you might want to have your accountant located nearby. But since the majority of the companies today are collaborating online, picking a firm that is based outside the city could save you a lot of money. If face-to-face communication and is a must for you or key to your company’s operations, a firm based nearby is probably the best solution for your.

Pro tip: Although there are some special cases, generally, you should more attention to the firm’s expertise and experience in your business niche rather than the location.

What questions should I ask when hiring an accountant?

After you have determined exactly what your accounting needs are, there are a few standard questions you will want to ask each of the candidates you interview. These include:

  1. 1. How long have you been in business?
    2. Do you have any references?
    3. How do you communicate with clients?
    4. Do you work alone? Will my account details be shared with/handled by someone else?
    5. Can you give your opinion on the business’s current accounting system?
    6. How do you prepare a business for tax season?
    7. How do you calculate your fees?
    8. Which, if any, accounting programs or systems do you recommend?
    9. Do you see any challenges particular to my industry that concern you?

Pro tip: Consistent questioning will help you to spot trends and differences in the answers, and give you a firm basis to make an informed decision. Before putting the list of questions together, try connecting with other business owners and ask them about the biggest challenges they faced.

How much should I pay an accountant?

Most business owners think that accounting fees are set, but there is always room for negotiating. While £500 to £1000 per year is about the going rate, it all depends on how involved they will be, as well as how well you’re already keeping your records. The more organisation your records need, the more time your accountant is going to need to get them in order, pushing up their hourly fees. It’s best to define your business requirements from the beginning so that the work expected from both sides is understood and the work hours are measurable.

Pro tip: Make sure that you do enough research on what your business needs from an accountant and come up with clear requirements so that the candidates can provide their quotes. After that, negotiate, negotiate, negotiate.

Is there an alternative solution?

These days, there are a number of software programs that allow you to manage your books and keep control of your accounts. Most software can also integrate well with payroll and cashflow operations. They are built by professionals and rely on a pay-as-you-go or subscription-based model to allow for maximum flexibility for any type of company.

Currently, the top choices for accounting software for small businesses are:

Xero: Available as a desktop version and a mobile app, it allows businesses to reconcile incomings and outgoings, send invoices, or create expense claims – from anywhere. Secure and reliable, Xero is packed with all the time-saving tools you need to grow your business.

KashFlow: Powerful and easy-to-use, KashFlow is designed to run small business without any accounting or bookkeeping knowledge. After a quick registration, you can try the free trial for 14 days before you decide if you want to subscribe to the paid version.

Quickbooks: This simple accounting software is used by thousands of small businesses that are looking to do all their financial management and planning in one place. Designed to simplify the accounting side of business and accommodate the need for invoice customization and customer data storage.

ClearBooks: Packed with multiple features to save time and money, ClearBooks lightens your workload with a simple and intuitive interface. It has all the key attributes to allow small businesses to grow organically.

Pro tip: Depending on the nature on your business, online software can be a valuable resource. Define exactly what your business needs and if these services can be covered by the software then you can compare the pricing with quotes from offline accounting companies.

A final word

Whether hire an accountant or do it yourself with the help of specialised software (or even combine the two), it’s important to stay on top of your accounts. Knowing your strengths and the challenges of the industry will help you assess the situation and establish what makes sense in the long run for your company.

The materials and content on this website are not intended to be and do not constitute financial advice. They are provided for general information purposes only. No warranty, whether expressed or implied is given in relation to such materials. We can not be held liable for any technical, editorial, typographical or other errors or omissions within the information provided on this website, nor shall we be responsible for the content of any web images or information linked to this website. Before using the information presented in relation to accounting, finance and tax, you should seek the advice of a qualified accounting professional and undertake your own due diligence.