There’s running your business, and there’s running your business finances. We all know these two things can at times feel incompatible. But you can’t do the first successfully without the second.
‘PAYE, VAT, personal tax, business tax, year-end accounts and tax returns all come into play once you’re running your own business…’
Are you equipped to deal with them?
‘When you set up your own business it’s based on your skill and experience. Not many of us are equally skilled with the financial side of running a company.’
Plus, ‘Of course, the larger you get, potentially the more complicated your accounting systems have to be.’
So, how, Which? explores, do you choose the right accountant?
Firstly, they remind, Which? members can call on them for help – see details on Which? Trusted Traders in the piece.
They also direct you to their own guide on ‘Should I register for VAT?’.
Beyond that, the advice is on ‘Choosing an accountancy firm’. Here are some tips to start with:
• Choose someone who specialises in your own area – and ideally works with small businesses like yours, recommends Which?
• Make sure they cover all the areas you want. This may stretch to raising finance, and offering ‘auditing and investment business advice’
• Choose a member of a recognised accountancy body – us, at ICAEW, or ACCA (Association of Chartered Certified Accountants)
• And be sure they have ‘professional indemnity insurance and appropriately qualified staff’
These are all things to think of.
Before you commit, Which? suggests:
• Asking peers for recommendations
• ‘Calling at least three companies and meeting with at least two face-to-face’
• Also, ask that the person you’ll actually be working with be present at a first meeting. (Chemistry matters: ‘you need to have a professional, friendly and open relationship with your accountant’, says Which?)
• Check beforehand that the initial meeting will be free of charge
• Ask about fees: what do they charge, when are fees payable?
Which? offers more specific advice on this last point:
‘You need to find out what their fees will cover, so you know what’s included and what could add up as extra charges. Will they do a fixed-price deal for the first year? If you want to keep fees down, do what you can to help them do their job, such as providing information or documents quickly when they ask for it.’
Once you’ve chosen an accountant, Which? says, ‘they’ll issue you with a ‘letter of engagement’. This is a contract that sets out the terms and conditions of your agreement with them.’
It reminds they ‘should keep in touch with you throughout the year, not just at year-end’, and that they ‘are there to help you run your business – don’t be afraid to call on their expertise. Communication needs to be two-way – you need to tell your accountant about changes in your business, problems, costs and so on.’
If you’re not happy with the way things pan out, remember ‘you can always switch accountants’.
Which? also flags up our own ICAEW BAS service offering ‘a free, no-obligation advice session with a Business Advice Service (BAS) chartered accountant’.
It’s a useful summary – one we’d go along with you.