An accountant is an essential adviser for any business. Adam Bernstein offers nine tips to help you choose the right person for maximum value.
Selecting an accountant can appear a daunting task, but if you choose correctly, they can become an asset to your practice. Not only because they can handle your financial and operational affairs, but also because they can offer professional business advice on a number of other topics.
As you will need to give an accountant detailed access to business information, it is crucial that you choose well. Remarkably, anyone can set themselves up in business and style themselves as an ‘accountant’ or ‘tax adviser’, but only those that are professionally qualified and belong to the appropriate body can use the terms ‘certified’ or ‘chartered’.
Choosing badly could be worse than having no adviser at all and, importantly, practices need someone who can help find fraud. Indeed, there have been numerous stories in the national press over recent years of dental professionals stealing funds from the practice.
Here are nine tips to help you find and use an accountant that suits your needs.
1. Help you need
The first step is to identify the areas where you need support and what you need an accountant to do. Consider the complexity of your accounting needs. Evaluate whether it is just end-of-year financial statements and tax returns, or if you require support throughout the year with matters such as PAYE, corporation tax, VAT, or income tax and IR35.
It would also be beneficial to try and foresee any future requirements you might have, especially with regards to raising external finance, and consider whether your accountant is equipped to deal with these.
2. Size is important
Bigger is not always better. Smaller accountancy firms can often be better suited to smaller businesses. An accountant running a small practice is a business owner just like you and will know what it’s like.
Also consider your personal needs and preferences. Would you prefer to work with one person on a day-to-day basis or would you feel more comfortable knowing that there is a larger team dedicated to your business?
3. Experience counts
Make sure that the accountant has previous experience working in dental or at least healthcare. It is not essential, but experience of working in the profession or similar will be a good indicator of an accountant’s suitability and suggests that they have some good business insight into the dental market.
4. Look around
Arrange to meet with a few accountants so you can compare services and fees. As with any business or financial decision, value for money should be a key consideration when deciding.
Agree fees and charges upfront, along with how and when you will pay. It is vital that you understand what this fee includes. For example, is advice included, or will you be charged at an hourly rate for any one-off questions you may have?
Many businesses are facing cashflow pressures and an accountant may be able to adapt their fee and charging schedules to help.
5. Added value
Consider how the accountant will add value besides bookkeeping. Your primary consideration when choosing an accountant should be the value they can bring to the practice.
While their primary task is ensuring all your accounts are in order, it is their ability to deliver specialised expertise and resources that should lead to a successful business relationship. Try to gauge whether they are able to provide services above and beyond your bookkeeping needs.
6. Seek out the qualified
Ensure that the accountant you choose has a professional qualification and belongs to a professional body. You may come across people offering ‘accounting services’ that are unqualified. These ‘accountants’ are unlikely to carry liability insurance and any apparent fee savings may turn out to be costly in the long run.
A professional qualification also means the accountant will be required to learn continuously – and can be disciplined by their professional body if they fail to act professionally. Professional bodies will usually have member directories available, allowing you to search for a qualified accountant near you. Look for a qualification from a professional body such as ACCA, ICAEW or CIMA. The six professional bodies are overseen by the Financial Reporting Council (for more details, visit tinyurl.com/yw2brc95).
7. Personal chemistry
Ensure the accountant is somebody you can work with, as they will be a key business adviser. It is of utmost importance that you trust the person who will be handling your finances and feel comfortable to ask them any questions you may have.
Most accountants will offer a free initial consultation, allowing you to assess how successful your working relationship might be.
A breakdown in communications between you and your accountant may lead to financial confusion, hassle, and ultimately expense, to you and the practice.
8. Be organised
If an accountant has to spend time wading through invoices or compiling the books you should expect to pay handsomely for this. That said, the direction of travel from HMRC is toward digital record keeping and submissions of returns via what it calls ‘making tax digital’ is forcing the matter.
Any accountant you engage should be able to brief you on how best to keep records – given the size and nature of the practice and its structure… sole trader, partnership, or company – and software that can take the sting out of the process. Check if any software recommended can deal with deposits and products you may offer on the side as well as the normal reporting obligations.
Many accountants have ‘preferred’ packages that come with discounts on the monthly subscription, and if the accountant is more skilled/familiar with a package then they will be able to help you much more easily than if you have opted to use software they are not familiar with.
9. Keep good records
HMRC levies penalties for not keeping proper records. The self-employed and partnerships should keep records for five years after the filing date of 31 January. For companies, it’s six years after the end of the accounting period. In both cases, records should be kept for longer if HMRC is investigating.
Accounts for companies are a legal requirement and need to be in a defined format. But for sole traders and partnerships, whatever is produced tends to be written for the self-assessment return.
People over price
An accountant is an essential adviser for any business, so investing time in choosing the right person is imperative in order to gain maximum value. Consider the person not just the price; low cost doesn’t always translate into a good working relationship.
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