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Choosing an Accountant

Working for yourself, whether as a sole trader or the director of your own limited company, can be an incredible burden if trying to take care of all of your accounts alongside the day to day running of your business alone. There is no legal requirement to appoint an accountant if you are running a small company but there are a number of benefits to using one. An accountant will:

  • deal with correspondence with HMRC and Companies House
  • do your book keeping
  • submit your returns and accounts
  • provide advice on tax planning, financial planning, relevant legislations, expenses, dividends and your company’s statutory and financial obligations
  • complete payroll administration

Many contractors like to take a hands-on approach to their accounts which is perfectly fine and even wise for new contractors as it can help to understand the financial side of your operations more thoroughly. Going completely alone, however, loses you some professional support backing your corner and may even cost you time and money (some will choose not to take on an accountant in order to avoid the costs, but in the long run, a good accountant is likely to save you more money than it would cost you to hire them).

Before choosing your accountant, consider first what you want. After all, it is difficult to make a decision if you don’t really know what it is you are looking for. Questions to ask yourself may include:

  • how much do I want my accountant to do for me? (you are not going to want to purchase an all-inclusive service if you actually intend to do some of the work yourself)
  • do I want to meet with my accountant in person? (it is no use choosing an accountant that is based 400 miles away from you if you want to meet them regularly)
  • do I want to be able to seek advice from my accountant? (if you wish to receive advice on contractor-specific matters such as IR35, it is wise to choose a specialist)

Once you have answered these basic questions, you can start looking for your ideal accountant, as you will now know what level of service you require, whether a local accountant is important to you or not, and if you require an accountant who specialises in contractor needs (recommended). As you may not find perfection, it is also important to know your priorities, for example, how important is it to you that you get along with your accountant versus getting a cheap service. Take the time to fully understand your own wants and needs prior to setting out on your accountant search.

Searching for an accountant can often start with endless pages of Google listings which get you nowhere but where you started. Some ways to define a list of potential accountancy firms include:

  1. The Search

    Although this can be a mind numbing and sometimes fruitless exercise, try it and see if any on the first couple of pages jump out at you. Avoid simply searching for ‘accountants’ but be more specific such as ‘contractor accountants’ or ‘accountants in Surrey’ for example.

  2. The Friend

    Reviews and recommendations are everywhere. All you have to do is a quick search for recommendations on contractor forums and search engines to find out what people are saying. Don’t forget to ask other contractors too, whether friends or colleagues at your current contract, or complete strangers via social media, people are always glad to help.

    Remember, however, to be critical of people’s recommendations. We don’t mean to quiz them about their opinions but consider their situation against yours, for example, they may warn you against an accountant because they annoyingly ring them every week but that might actually be the type of accountant you personally are looking for.

  3. The Referrer

    You can find lists of preferred suppliers everywhere. Recruitment agencies and various contractor websites have lists of accountants to get you started. Take a look at our list of contractor accountants if you are currently looking for support.

Now you should have a decent list of potential accountants. So it is time to start whittling them down to a select few:

  • Do they match your answers to the three basic decision making questions above? (for example, if you are looking for a local accountant, you can put aside anyone who is not)
  • Are they within your price range? (all contractors will have different budgets so get rid of any who are out of your range)
  • Have they had good reviews or recommendations? (trust other peoples experiences to help you avoid mistakes)

Once you have managed to get your list down to a few who match your basic requirements, it is time to start talking to people to find out more about them and find the accountant for you:

  • What qualifications do they have? (your accountant should be qualified with one of the recognised accountancy bodies such as ACA)
  • What experience do they have? (find out if they have worked with contractors prior including in your specific field, how long they have been practicing and how many clients they have. This may not be important to you, which is where your pre-search prioritising comes in, but if you are choosing between two equal accountants but one has more experience, it may just help your decision)
  • What software do they use? (particularly if you are going for an online accounting package, you are going to want software which allows you to do everything you want it to)
  • Are there any hidden fees? (most accountants will charge a monthly rate but there may be extra charges for certain services such as completing your personal tax return. Be clear on all charges before proceeding)
  • Who will be your actual accountant? (particularly with larger firms, you may be talking with a sales representative or a senior manager and not your potential account manager to be. If you want to make sure your accountant knows what they are talking about or just that you might get along with them, it is worth asking to speak with them)
  • Will they be able to deliver on your specific needs? (it is no use choosing a local accountant because you wish to meet with them regularly or if you need someone who can make out of hours calls, if they are not willing to do so. Clarify your wants and needs prior to signing up so that everyone is clear on what they are getting into and you can be sure that you will get the service you require)

You should have at least one accountant who you feel will be a decent match for you. If you have more than one, then lucky you, you will just have to decide who you like best or who gives the best value for money. If you are really stuck, you can always try quizzing them on matter such as IR35 to test their knowledge and how well they explain things.

Once you start trying out your new accountant, you may wish to keep under consideration whether you feel they are providing good advice to you, whether they explain things simply enough for you and if they are patient with you when you don’t understand, and whether they seem to be delivering on what you wanted.

As with any relationship, you have to enter partially blind. No matter how much research you put in, you are only going to find out if it is a good fit or not once you get going. Don’t be afraid to move to another accountant if the one you choose just isn’t working out for you. And likewise, with any relationship, it takes two. So make sure you are providing your accountant with the information they need and responding to them when they ask for something within a reasonable time. This will ensure you get maximum value from the accountant of your choosing.

By Contractor Weekly


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