This week three US banks collapsed and they all had one thing in common – their auditor was KPMG. It’s a bit of a shadow over the Big Four auditor’s reputation, although the details are nebulous.
So, why mention it here? Well, while KPMG were acting as an auditor, a specialist area of accountancy, it’s a reminder that an accurate view of your accounts is essential (not just a flattering one), and that means that one of the most important things your business needs is a great and trusted accountant.
That begs the question, how do you find the best accountant for your business?
How to choose the right accountant
Choosing an accountant is a bit like choosing a business partner – it’s personal and it needs to be someone you can see yourself working with for a long time. You’re in this together, which means you need to be able to trust this person or company. It’s also important that you choose someone who understands your business mentality and goals, but who will take a truly objective view of your accounts so you don’t end up with any nasty surprises.
Clive Lewis, head of enterprise at The Institute of Chartered Accountants in England and Wales (ICAEW) told The Guardian: “If you get the wrong person, you can miss out on things you should know and that can be very costly.”
Here are our top tips for choosing an accountant:
Invest in a firm with a good reputation
Arguably the most important tip when choosing an accountant for your business is don’t cheapskate. You don’t have to go to the most expensive accountancy firm, but you definitely shouldn’t choose your accountant based on who’s the cheapest. There are some things that are not worth cutting corners on and business accounts is one of them. You want to make sure you get this right, whether it’s paying tax or keeping shareholders informed. So, choose someone with a good reputation. If you align yourself with people who have a reputation for doing things properly you’re far less likely to end up with people asking time consuming questions.
Choose a certified or chartered accountant
Leading on from our first point, make sure that the person you choose is a certified or chartered accountant. Do your due diligence and make sure they’re properly qualified. It will give you peace of mind, but it will also help to boost your company reputation by showing you are approaching the fundamentals legitimately and professionally.
Ask yourself if location matters
In a digital world you might think that location doesn’t matter, but when it comes to choosing a business accountant, it does. It’s not so much about whether you can pop into their offices for a face to face chat – unless that’s personally important to you – communications can be done from anywhere in the world and cloud-based technology means accounts can be managed from anywhere. The bigger thing is their knowledge and, possibly, their reputation. For example, if you’re a UK business trading purely in the UK then you will probably want a UK based firm with knowledge that applies specifically to local tax laws. If you trade around the world, you will want to choose someone who understands the intricacies of dealing in multiple global territories, or you may choose more than one provider, depending on the structure of your business.
Look for an accountant with relevant expertise
Industry matters. You want to look for someone who has experience dealing with companies of a similar size, turnover and type as yours. In an ideal world they will also have worked with companies in similar market sectors as you so they understand the unique requirements of your business or the challenges you may face. You can check their reputation online and based on reviews, but it’s also good to ask for a client list.
Focus on preparation. Start by reviewing your business and seeing where it needs improvements before it’s ready for sale. We have already talked about pre-sale preparation for maximising sale value of your business including exploration of your goals, business readiness and positioning.
Talk to government and business associations
Google is a wonderful thing but if you want an objective opinion when it comes to choosing the right accountant, government and business associations are great places to start. Local chambers of commerce are often willing to offer advice (which is usually free), and in addition you might find that they’re beneficial for building local business networks.
Tap into your social networks
Nothing beats a personal recommendation. Speak to friends, family members and other business owners that you trust and ask them if they would recommend their accountant. If they do, then ask why and if not, ask why again. I often talk about the importance of learning, and a negative answer can often be more helpful in refining your quest than a positive one. If you’re new to working with an accountant then all of that information will give you a greater sense of what questions to ask. If you don’t want to limit your search to your nearest and dearest, take it online and put out feelers with your LinkedIn and other social media contacts.
Decide how the accounting work will be divided
Make sure you’re clear about what you want from your business accountant. For example, you might have a certain amount of accountancy handled in-house, such as bookkeeping, billing and invoicing. In that case you only want your accountant to handle more detailed tasks like account reconciliation, filling out tax return forms, payroll and capital depreciation calculations. You may decide at a certain stage that you will bring most accountancy in-house with a dedicated and employed accountant.
Get someone who’s proactive about saving you money
With every job there are people who do the minimum and people who go the extra mile. Look for an accountant who treats your business like their own – proactively looking for ways to save money, whether it’s looking at your operating costs or where you can offset items against tax. They should have the knowledge to tell you if a percentage of your phone bill can be expensed as a sole trader, or where you can avoid unnecessary tax (legal tax avoidance) vs evading tax (illegal) to maintain a balance between being business savvy and taking unnecessary risks. Remember, if you break a law, it’s you who will be penalised.
Find out what software the accountant uses
Software is an essential part of all our lives, and that definitely applies to accountancy. Different firms tend to have their own preferred software that they use. If you’re starting out then that won’t be an issue, but if you’re already set up with a particular system that might cause a challenge. Some systems are not compatible with others and trying to switch between them can be time consuming and cause errors.
Do background checks
Do your due diligence. Ask if you can speak to your potential accountant’s clients, look for online reviews and get first-hand information to check out the quality and reputation of your accountant. It might not just be about making sure they’re the real deal, but whether they’re a good fit for you in terms of customer service, approach and outlook.
Speak to more than one accountant
Just like interviewing candidates for a job, speak to more than one person before you commit to an accountant. If nothing else, it will give you an idea of your options and help you to make a better, more informed decision.
Look for someone with a growth mentality
Like we said, your accountant is a bit like a business partner. You need to work with them over time and you want them to be passionate about the same goals as you – namely, making your business a success. Your accountant should be motivated to help make your business grow with advice that considers both the short- and long-term development of your company.
How to choose an accountant for your small business
In addition to those general top tips for choosing an accountant, small businesses might want to consider some extra thoughts in order to maximise their opportunity.
Look for someone who things about more than annual accounts and tax compliance
It’s important to start by getting the basics right – annual accounts and tax compliance being at the top of the agenda. Remember that’s not the only thing that an accountant can help with though. For example, they can help you raise capital by finding grants, government funding, and tax relief schemes, help you sell shares in the business, crowdfund or find angel investment.
Make sure they’re a good fit for your business culture
Small businesses have different needs and challenges to larger businesses. If you’re a start-up or scale-up, look for a firm that understands your business culture and stage of growth. That way they can offer you tailored advice that proactively helps you grow.
Remember it’s ok to reassess your relationship with your accountant
You may find your needs change over time or what seemed like a good fit at the start just isn’t working anymore. It’s important to measure the performance of your accountant like you would with any other employee or partner. Monitor whether they ask you questions, how involved they are and see if they stay in touch on a regular basis or only when the big financial events in the calendar emerge. They are also responsible for building a relationship with you – so see if they do it.
Looking for advice on how to help your business grow? Or maybe you’re starting a new company and need a mentor? Contact my team and let’s see where we can make your big idea go.
