Choosing an Accountant
A smart man once told me to pay for the best advice you can possible afford and that in the long run good advice is worth the cost. Without a good accountant you may not be saving money with your Taxes which if worded another way means your paying too much tax which to me is even worse.
In todays business its still a good idea to find yourself an accountant who you are happy working with before you even set up in business. A competent professional will help you start off in the best way, helping you register for VAT, and determining whether you need to become a limited company from the outset, or whether that can wait. You can do all of these things for yourself, but often it can be beneficial to have expert advice to start out the right way instead of the wrong.
Even if your business is unlikely to grow beyond something that you can report on your individual tax return, having an accountant’s help can take the stress away, and almost always help you to become more tax efficient.
Another advantage of working with an accountant is that if you’ll have neatly presented year end accounts. That might not sound important right now, but it is likely that as your business becomes established you’ll need to borrow money to fund further growth. The bank will look more favorably on a business that can produce correctly presented, easy to read year end accounts. Another long term benefit is if you ever plan to sell your business neat and tidy books can lead to a bigger sale price.
If you have already started out in business without an accountant, don’t despair. But do get yourself sorted out with a good accounting partner well before you need to do your first tax returns.
So how do I go about finding accountants in UK?
There are a couple of things that you really ought to look out for, but after that it comes down to chemistry between you. You’ll probably need to share a lot of intimate financial information so you’ll need to be able to get along together and have a level of trust.
You should make sure that they are qualified and part of one of the three main accounting trade bodies in the country. That may sound obvious, but you can actually set up in business as an accountant with no formal qualifications. The most popular trade bodies are Chartered Institute of Management Accountants (CIMA), the Association of Chartered Certified Accountants (ACCA) or the Institute of Chartered Accountants.
Think about finding someone who is right for your business needs. If you’re starting out then you need a firm that will be there for you, that won’t mind taking your call when you get a bit lost, and that won’t be looking to levy a fee on you every time you ask them something easy or silly. That doesn’t mean going with a one man band necessarily, hopefully you’re going to grow, and you need them to be there for you as you do so.
Having mentioned fees – check out what they are likely to charge you. Although by doing so you will be asking for a specific answer to a non-specific question, they should be able to give you a reasonable guideline as to how much your year end accounts and tax return will cost. Ask too about costs for payroll services if you expect to be employing staff soon. In fact if you are intending to form a limited company then you’ll need payroll even to look after you and your other directors. Again this is something you can do for yourself, but hopefully you’ll be too busy running the business and making money! Then when you have a few staff and have grown a little you might want to look for a part time book keeper who should work between you and your accountant.
Remember that during your first years understanding how to best structure your business can save you paying unnecessary tax – your accountant is there to help you do just that. And save you time.
If your a new business owner and this article was helpful you may want to read about Indemnity Insurance and Business.
***Photo thanks to Alan Cleaver & Images_Of_Money***