If you are about to start a business or have already got up and running, then you may not yet have thought about what happens when you reach the end of your first year of trading. It can seem a long way off and there are so many other things to worry about when setting up on your own so trying to find an accountant is not at the top of your priority list. But a good accountant, one that suits you and your business needs to be chosen carefully, not in a last minute rush as you approach the deadline for filing your accounts and completing your tax return.
So when you do have a spare moment in that busy first year do some research into your options for accountancy services. You can of course opt for a DIY approach, and this is perfectly possible if the business is fairly straightforward but even for simple companies, including one-man consultancies, do not under-estimate how time-consuming preparing your own accounts can be. Not only will it take plenty of your time but you may miss out on tax-saving advice that a decent accountant will include as part of their service. You will also be saved the hassle of completing your tax returns, both personal and business.
But just how do you know what constitutes a good accountant and where you can find one?
You could, of course, simply do an internet search of your local area and phone a few likely companies. You could ask for personal recommendations from people you already know with businesses of their own. Some people also post on small business forums but if you do that you risk being inundated with messages from accountants selling their services rather than genuine recommendations.
Some accountants work independently from home and it is tempting to believe that these will be a cheaper option but that is not necessarily the case. The disadvantage of a home based accountant (or indeed a one-man band in an office) is that there is no-one to fall back on if they, for example, become ill and are unable to work when you need them. And if their charges are not significantly lower this may not be a risk worth taking.
Also make sure the company handles businesses similar to yours either by industry or size. You don’t want to find you are using an accountant that predominantly deals with large corporations if you only employ 5 people or vice versa.
Will you have a dedicated accountant so that you speak to the same person or see the same person each time? Remember that large accounting companies often do not assign your business to a dedicated accountant so there is little opportunity to build up a good relationship with your accountant and for them to truly understand your business and any issues it may have. This can be a distinct disadvantage especially as you may find yourself having to bring the accountant up to speed on your business each time you talk to them.
Tax in general is a complicated issue but corporation tax even more so, therefore, getting to know your accountant will help build up trust that he or she is competent to handle your tax affairs and can help you to minimise your tax liability.
Here are 4 essential questions to ask any potential accountancy firms that you are considering:
• Will you be assigned a dedicated accountant?
• What type and size of businesses do they currently deal with?
• Is the accountant local so you can easily meet up?
• Do they offer a fixed fee accountancy service?
It goes without saying that the accountant you choose should be qualified either as a chartered accountant or a certified accountant. Another factor to bear in mind is how much you may want to ask for advice during the year – this is particularly relevant for new businesses as they grow and evolve whilst establishing themselves. If you want to have the option to seek specific advice but don’t want to be surprised by a large bill at the end of the year then consider an accounting firm that offer fixed fee accountancy services. These usually include various price options from a basic service to one including regular telephone support or face to face meetings.
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