A Free Guide

How to choose a Great Accountant

1. Qualified Accountants 2. Size of Accounting Firm 3. Technology / Website 4. Personality 5. Prices 6. Relevant Experience 7. Advertising 8. Changing your accountant

1. Choose a Qualified Accountant Anybody can set up as an Accountant and call themselves an Accountant. It is therefore important to understand the differences between a Qualified Accountant and an Unqualified Accountant. The main two groups of qualified accountants practicing in the UK are Chartered Accountants and Certified Chartered Accountants. Both of these qualifications require passing Professional Examinations and many years Experience within an accounting practice prior to receiving a Practicing Certificate. In addition, accountants regulated by these bodies are supervised with regular visits to check the quality of the work being done, the accountants must have Professional Indemnity Insurance and must maintain their Professional Competence by attending Training update courses. Chartered Accountants are regulated by the Institute of Chartered Accountants in England & Wales (ICAEW) and have either ACA or FCA after their name.

Certified Accountants are regulated by the Institute of Chartered Certified Accountants (ACCA) and have the letters ACCA or FCCA after their name.

Unqualified accountants are not required to have any practical experience of working in an accounting firm or have passed any examinations to set up as an accountant. Anyone can set up an accounting firm and about one third of all accounting firms in the UK are unqualified. If you choose an unqualified accountant then there will usually be no professional body to complain to if the accountant advises you badly. If you choose an unqualified accountant, you should ask what experience and training they have had to enable them to work as an accountant.

2. Choose an appropriately sized firm If you run a multi-million pound organisation that is listed on the stock exchange and has overseas subsidiaries then the larger firms of accountants are best prepared to deal with your business as they are experienced in dealing with the issues that your business faces. Small businesses should use small firms of accountants (1 or 2 Partners / Directors) to prepare their accounts etc for four reasons    

Smaller firms charge less for their time as there is more competition in this area. Smaller firms specialise in acting for smaller businesses and are more experienced in giving relevant advice to this sector. Using a smaller firm, you will deal with the same experienced accountant who is easy to contact and will get to know and understand you and your business. You will be dealing with someone who runs a small business themselves and therefore understands many of the issues that you face.

3. Choose a firm with good Internet Presence The first thing that I’d do if I was choosing an accountant would be to check out their website. Firstly I’d want to check that the accountant had a website – secondly that the website was up to date (not talking about the 2005 budget!!!) and thirdly to find out more about the practice. Do they deal with businesses similar to yours? Are their fees competitive? Where are their offices? Who are their Partners? Are they qualified? Any decent firm of accountants should have all this information on their website. A firm without an internet presence must be out of touch with modern ways of doing business or maybe isn’t looking to take on new business – so I’d avoid a firm without an online presence. It also speaks volumes about their knowledge of Information Technology (IT). Good firms of accountants will use IT to deliver services to clients more speedily and efficiently than their competition.

4. Choose an Accountant that you like You should choose an accountant that you find easy to get along with. Your accountant will give you advice and it is important that you trust him enough to accept the advice and discuss the issues that you face in your business. If you feel your accountant doesn’t listen to you or you disagree with your accountant but don’t feel comfortable to discuss the issues with him then you may not come up with the best result for your business. The easiest way to judge whether a potential accountant has the personality you want is to take advantage of the free initial consultations that all good firms offer and ask the accountant a few questions and discuss with them some business issues that you face. See how you feel about their advice before finally choosing your accountant.

5. Choose Competitive Prices

A major concern to all business owners is the level of fees that they are charged by their accountants. Fee levels vary dramatically between firms but most accounting firms are reluctant to publish much information on their fee levels as it may upset existing clients who may be charged more than the rates advertised for new clients. Most accounting firms use charge-out rates to determine the fees that they charge to clients. Each member of staff within the accounting firm will have a charge out rate – usually of about three times their salary to allow for paying overheads and to cover non-chargeable time (training etc.) and a little profit for the owners of the business. Partners of firms will have a charge out rate of usually between £80 and £300 per hour. Generally, the smaller the firm, the lower the charge out rate for the partners / directors. You can request to know the charge out rate of the person that you deal with or you can request a breakdown of the charges when you receive an invoice – this may be interesting reading for you!!! Before hiring an accountant, you should get an estimate of the fees that your business will be charged. Accountants will have a good idea of how long it will take to do your work and the fact that there is an estimate should make sure they don’t go over this. If the charges are higher, then the accountant should be able to advise you of the reasons for this and give advice as to how to make your fees lower in the future.

6. Choose an accountant with relevant experience It is important that the accountant you choose has lots of relevant experience in dealing with businesses similar to yours. This will enable him to speedily and expertly deal with any issues you face as it’s always easier second or third time around – he will also be aware of areas that other similar sized businesses are doing things in a better way and be able to advise you accordingly. The accountant should also have specialised computer software and procedures to speedily complete your accounts and tax return. This knowledge will assist when setting up your accounting systems (books) as he’ll know what works well for other businesses of the same size or in the same industry. Over time all accountants tend to specialise in certain aspects of accountancy and taxation. My personal specialism is as a general practitioner to small businesses, this enables me to concentrate on the rules relating to small businesses and I don’t have to worry about overseas tax issues or Stock Exchange regulations etc.

7. Choose an accountant that advertises locally

An easy way to check whether an accountant is keen and hungry to take on new business is to look at the local Yellow Pages, Thomson Directory or any other publication with advertising. The accountants advertising in here are obviously on the lookout for more business as it isn’t cheap to advertise in these directories, there are also the online versions of the directories such as Yell.com or Scoot. An accountant that is actively looking for more business is more likely to put himself out to help you with your fees and making sure you are happy with the service that you’re receiving. Some accountants have enough business and don’t really want or need any more – maybe they’re at full capacity or slowing down ready for retirement – AVOID.

Changing your accountant It is surprisingly simple to change your accountant. Qualified accountants and even most unqualified accountants have a code of conduct when a change-over takes place to make sure everything runs smoothly. Your new accountant will write to your former accountant to advise him of your wishes to appoint a new accountant (accompanied by a letter from you). Assuming that there are no problems (outstanding fees) then the old accountant will send the new accountant all the information he needs to pick up the case – this will include the last set of accounts and tax returns prepared together with the workings and calculations that were used as a basis for the final figures. The old accountant will not charge anything for this handover of information. The new accountant will inform the tax office that he is acting for you by completing a form (64-8) that is signed by you and future correspondence from the tax office will automatically go to your new accountant.

Finally We hope this short guide has helped you in your search for a new accountant. We are a small firm of Chartered Accountants based in Padiham, near Burnley, specialising in helping new and small businesses. Please call us on 01282 779480 to book a free initial consultation or for more information about us, visit our website www.aaatax.co.uk.