Once you have decided upon starting a new business it is crucial that you enlist the services of a professional accountant. Ideally, arrange this even before you commence trading.
How they can help
Good accountants should not only be able to prepare accounts but also offer you advice on all areas of your business. This could include:
Here are some fundamental guidelines to aid you before making your choice:
1. Check their qualifications. You want to make sure they are a member of one of the three main professional bodies, which are:
3. Ideally meet two or three different accountants before deciding
4. In most cases the first meeting should incur no charges but check beforehand
5. Ask if you can approach their existing customers for references
6. Situated locally - will obviously make meetings more convenient
7. Preferably they are dealing with companies similar to the size of your business
8. Do they understand the business sector you are entering?
9. How many partners are involved in the practice and who would be handling your business affairs? Arrange to meet this individual to ensure you feel comfortable with them
10. Choose an accountant who is used to dealing with businesses that are similar in both size and complexity of your own business
11. Find out how pro-active they are - do they issue reminders to their clients regarding any forthcoming returns that may be due?
12. Their fees - query what the charges are. Although many accountants do charge by the hour, because initially you are a small business, most should be willing to agree a fixed annual fee with you.
13. Normally by keeping good records, perhaps on Excel files or a software package, makes it easier for your accountant to process. In turn this should help keep their fees down
14. It would also be worthwhile discussing their charges regarding your personal tax matters. This would make perfect sense as they would already be looking after your business affairs
Letter of Engagement
Once you have decided upon the accountant you wish to manage your affairs, then they should prepare the terms of the relationship in a 'Letter of Engagement', which they will issue to you.
Like any good relationship, open and regular communication with each other is essential. Diligent accountants should be notifying you well in advance when returns of some type are due - whether it be quarterly VAT returns or end of the financial year.
Similarly, it is incumbent upon you to keep good records, update your accountant with any changes to your business and make sure you have all the relevant information readily available for them when needed.
Occasionally, review your relationship with your accountant to check you feel you are still receiving good value for your fees. Are they still responsive to your business needs? Has your business outgrown them or vice versa?
Hopefully, by following the above guidelines you will be delighted with your accountant, but if not then we would strongly recommend going through the same selection criteria as before.
How they can help
Good accountants should not only be able to prepare accounts but also offer you advice on all areas of your business. This could include:
- whether to set up the business as a sole trader, partnership or limited company
- guidance on registering for VAT and preparing the necessary returns
- how to best set up all areas of your bookkeeping and records
- help with raising finance and preparing business plans
- assist in cash-flow predictions
- advise on setting the necessary profit margins to ensure profitability of the business
- notify you of any particular legislation applicable to your new business
- even offer a full payroll service for you and any of your staff
- general tax advice
- audit service
- verifying accounts of another existing business that you are considering purchasing
Here are some fundamental guidelines to aid you before making your choice:
1. Check their qualifications. You want to make sure they are a member of one of the three main professional bodies, which are:
- the Association of Chartered Certified Accountants (ACCA)
- the Chartered Institute of Management Accountants (CIMA)
- the Institute of Chartered Accountants in England & Wales (ICAEW)
3. Ideally meet two or three different accountants before deciding
4. In most cases the first meeting should incur no charges but check beforehand
5. Ask if you can approach their existing customers for references
6. Situated locally - will obviously make meetings more convenient
7. Preferably they are dealing with companies similar to the size of your business
8. Do they understand the business sector you are entering?
9. How many partners are involved in the practice and who would be handling your business affairs? Arrange to meet this individual to ensure you feel comfortable with them
10. Choose an accountant who is used to dealing with businesses that are similar in both size and complexity of your own business
11. Find out how pro-active they are - do they issue reminders to their clients regarding any forthcoming returns that may be due?
12. Their fees - query what the charges are. Although many accountants do charge by the hour, because initially you are a small business, most should be willing to agree a fixed annual fee with you.
13. Normally by keeping good records, perhaps on Excel files or a software package, makes it easier for your accountant to process. In turn this should help keep their fees down
14. It would also be worthwhile discussing their charges regarding your personal tax matters. This would make perfect sense as they would already be looking after your business affairs
Letter of Engagement
Once you have decided upon the accountant you wish to manage your affairs, then they should prepare the terms of the relationship in a 'Letter of Engagement', which they will issue to you.
Like any good relationship, open and regular communication with each other is essential. Diligent accountants should be notifying you well in advance when returns of some type are due - whether it be quarterly VAT returns or end of the financial year.
Similarly, it is incumbent upon you to keep good records, update your accountant with any changes to your business and make sure you have all the relevant information readily available for them when needed.
Occasionally, review your relationship with your accountant to check you feel you are still receiving good value for your fees. Are they still responsive to your business needs? Has your business outgrown them or vice versa?
Hopefully, by following the above guidelines you will be delighted with your accountant, but if not then we would strongly recommend going through the same selection criteria as before.
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