The financial records form a vital part of the day to day running of a business. They need to take into account and record all incoming and outgoing payments. Not all companies need to employ an accountant on an ongoing basis but most choose to use one to compile and prepare the needed financial statements for presentation the relevant authorities.
Some businesses employ an in-house accountant and others prefer to pay an external accountant to do the work required. It doesnt really matter which option you choose, but it is recommended that you use an accountant who has “chartered” or “certified” within his/her business name which means he/she is affiliated with a professional body like the Association of Chartered Certified Accountants (ACCA).
Accountants offer a range of services to help business owners to get on with what they do best, running a business. Accountants are an invaluable resource and they will probably have to be one of your most trusted advisors.
Accounts are a great source of advice for both, start ups and ongoing concerns. Some Accountants will charge you for this service. So be sure to ask beforehand.
Accountants offer bookkeeping services too and sometimes this is great because you have one party dealing with all your financial documents. It is very common for businesses to do their own bookkeeping, but this generally requires some experience in bookkeeping.
VAT registration and returns can be handled by an Accountant who is able to offer piece of mind that records will be accurately compiled and filed in a timely manner with the relevant tax offices.
Accountants also compile tax returns and annual accounts. A good chartered accountant can save you money by using their working knowledge of the rules, regulations and exceptions to reduce the amount you pay in taxes. Annual accounts can also be compiled by an accountant, who will submit them to the relevant parties (e.g. Companies House) by their due date.
Finding an Accountant
It is a good idea to ask friends, family or business contacts to recommend an accountant. This should help you in the right direction. You could also look at some of the directories held by professional bodies:
- The Association of Accounting Technicians(AAT)
- The Institute of Chartered Accountants in England and Wales(ICAEW)
- The Association of Chartered Certified Accountants(ACCA)
- The Institute of Chartered Accountants of Scotland(ICAS)
- The Institute of Chartered Accountants in Ireland(ICAI)
- The Chartered Institute of Management Accountants(CIMA)
Choosing an Accountant
Before choosing an accountant to handle your financial obligations, consider the following:
- Try to find out if the accountant has experience with companies in your sector. This will benefit you because the account will have a better understanding of what your business is about.
- Check that the accountant has the necessary qualifications and have a look to see whether the company has the any of the following letters in its name: ACA, FCA, ACCA, FCCA, ACMA or FCMA. These letters imply they belong to one of the industry specific associations, who require accountants to have a few years experience before admitting them as members. This means you can make sure the accountant is qualified and able to deal with accounting issues before taking them on.
- If you are a small business try to find a smaller accountancy firm, which is likely to understand your business better and provide a more personal service. Larger companies generally require the increased resources of larger accountancy firms.
- If you can try to meet face to face with a few accountants before choosing one. This gives you a chance to judge whether they seem trustworthy. You could also ask for some references from their current clients and ask them what they think of the accountant and the service he/she provides.
Briefing an Accountant
When you meet an accountant for the first time you need to explain to the accountant what your business does, how it operates and what financial milestones you are aiming to achieve.
Start ups should describe what type of business they are planning to set up, and what their future projected financial position is likely to be. If you have not done these projections then ask the accountant what he can do to help you draft a business plan and reach your objectives.
You should find out if the Accountant has dealt with similar businesses in the past and what services he can offer. If you already have a system in place, ask the accountant if he can do to improve it.
You will also need to find out what he/she charges and what services those charges include. If the fee is charged on an hourly rate then try to get an estimate of what their service is likely to cost your business over the course of the year. Some accountants charge a fixed annual fee which normally includes certain services. Find out what youre getting for your money.
Once youve decided which account to use, they will issue you with a letter of engagement. This is a contract between you and the account, which sets out the
- Accountants responsibilities
- Your responsibilities
- The fees and how they will be charged
Try to keep a steady stream of contact with your accountant and keep him/her up to speed on any new developments.