There really is no substitute for competency or experience. This holds true for all roles in a business or organization. The role of accountants or accounting firms are sometimes largely ignored by new businesses, who wake up later when Her Majesty’s Revenue and Customs Department starts trawling records. If your organization or business is large enough to have a qualified and competent team to handle accounting processes and regulatory requirements, you can focus your energy on your core business activity. However, if, on the other hand, your business is not large enough, you certainly need professional assistance to get your books in order. Many small businesses start off on a wrong note, with many entrepreneurs, giving in to the urge to don the role of an accountant, in an effort to cut costs. And, more often than not, such decisions are a ticket to misery. If you have finally come around to accepting the fact that a qualified small business accountant is what your business needs, here’s all the information you need to help you choose an accountant.
There is a fine line here. You need to look for an accountant or an accounting firm that offers complete financial advisory services, and not just a tax planning services. After all, your objective would be to expand operations and to grow. Which means that you need financial planning. And in this digital milieu, a large number of small business owners establish a business and move on, onto other concepts after either exiting their businesses or handing over. This certainly requires professional assistance for smooth sailing, to prevent complications in the future. Therefore, know what to look for in an ACCA when you shortlist a few firms or individuals. Looking at the clientele and the roles of the shortlisted entity will more or less furnish you with all the information you need.
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Take a good look at the services offered by the accountant. Typically the functions include, but are not limited to preparation of tax returns, analytical inputs on tackling financial issues, preparation of comprehensive financial statements, statement of cash/reserves, income statement and balance sheet. An accountant or firm that offers these services in addition to inputs of an advisory nature will meet your requirements. Regardless of the scale of operations of your business, or the turnover, when you are a part of the formal segment, you are under the ambit of regulations and compliance. This means that your business needs to follow the set of processes accepted by regulatory authorities. This also helps in maintaining the health of the organization, preparing the stage for expansion smoothly. If your organizational goals and execution converge on the same lane, you will need full fledged services of an accountant. It is better to rely on the services of an agency that will meet present and future requirements.
This should ideally be high on the criteria. As regulations and compliance requirements will forever undergo modifications, with new regimes replacing old ones, an ACCA is expected to remain licensed through continuing education. An ACCA is basically an undergraduate degree, where the holder has cleared exam and requirements of experience for certification. Effectively a small business would require the services of an ACCA who is certified and licensed. An ACCA may have specialized skills in a few areas, such as Accredited in Business Valuation (ABV), or a Certified Valuation Analyst (CVA), or a Personal Financial Specialist (PFS). These are specialist roles that overlap with the primary roles of an ACCA . For organizations or businesses that need more services from an accountant or firm, then it would be advisable to look at other qualifications and areas of expertise, such as a Certified Management Accountant (CMA).
Also Read: Why Should Accountants Specialize?
While it is true that the core functions of an accountant or an accounting firm are more or less the same, businesses should not lose sight of the fact that there are different processes and factors within each domain or industry. This difference has a bearing on the finances of a business. For example, receivables will differ across business segments. This will have an impact on financial advisory services and planning. Therefore, a simple rule of thumb on how to find the right accountant would be to look at the types of industries that the accountant has been associated with in the past or in the present. An entity with exposure to different industries and segments would be a better option, as you will get to benefit from the best practices of other industries. And, bear in mind to zero in on a firm or individual who has adequate experience in the segment where your business operates.
The urge to go with a very large firm may sometimes be overwhelming and at times appear as the natural choice. With reputations and branding playing a major role in swaying decisions of individuals and companies, you really cannot be faulted for thinking likewise. However, if you are a small or medium sized firm, it would pay to engage a firm that has the right kind of experience, and more importantly, have the time and resources for you. Let’s face it. While clients are always welcome and actively solicited by big firms, the size of the business also matters. Therefore, the ideal fit for a small or medium business would be an accountant or a firm that is not too big. This way, you can be sure that you will receive not just the right kind of support, but will also receive time from the firm to hear you out and partner you in your plans for growth and expansion.
This is vital to the success of your venture. Because accountants need to be given full access to your records and books, you need to use the services of an individual or firm that is absolutely trustworthy. Remember, that it is your business model that is at stake. Confidential information, client lists, vendors, pricing parameters, profit margins etc. will naturally be shared with the accountant. Therefore choose one who is reliable and one who has a reputation for maintaining ethical business confidentiality. While there are law governing non-disclosure and ethics, they actually work only upto a point. The best way to get better results is to partner with the best resources. Therefore seek out references from the shortlisted accountant or firm. If you happen to know someone or a firm that has employed the services of this entity, it will help a lot. But the chances of that occurring is very rare. Therefore, take time to probe a little about the agency or individual. With digital records and methods of finding information, you would not actually find it too difficult to gather information.
This is the era of digital transformation. Virtually all businesses and workflows have embraced digital methods. You really would not want to be a misfit in a digital world. While all other areas of business activities are modernized, it would appear rather strange if your accounting partner follows practices that are from a bygone era. Choose a firm or individual who makes use of the latest software and technology to leverage skills and abilities for better results. You need to be able to access reports whenever you find the time. You need to have absolute security, with foolproof privacy of data. Look for a local accountant or accounting firm that takes care of its clients and the data of the clients by deploying secure software and applications. Financial data should never be compromised. Never let yourself into a situation where third party breaches compromise your security.
This entirely depends on your style of work. If you are the kind who would like a one-on-one interaction with service providers or clients, then you need to look for entities operating out of locations close to your business. On the other hand, if you are more of a digital native and comfortable with interactions over one of the many different available channels, such as mail, video conferencing, or collaborative accounting software, then you can settle for number crunching brains anywhere in the world. However, accounting has got lot to do with local regulations and compliances. If you avail the services of an overseas based expert, you need to ensure that the entity possesses adequate knowledge about local regulatory requirements. This is a little on the tricky side. It would be a good option to choose an accountant or a firm operating within the geographical location or jurisdiction of regulatory bodies.
This is something that is relevant to the billing aspect, and the expenses point of view. Typically, accounting services are billed by the hour. Therefore, if you choose an accountant or firm that is flexible, by adopting a collaborative approach in accounting, you can cut down on the number of hours that will be billed to you. For instance, the whole process of bookkeeping and generation of reports depends on data, the numbers that are generated from activity, such as sales and invoices and expenses etc. If you possess the manpower internally to complete this task, then you could save yourself some expenses. This way the accountant can focus on the more specialised areas of accounting. However, some firms may not be very comfortable with this idea, as they typically like to be involved in more of an end-to-end role. Choose your accountant or firm as per your ability and the flexibility of the firm you employ.
You need an accountant or an accounting firm that will help your financial position and keep tax exposure low. However there is a fine line between avoidance of tax through legitimate means, and evasion of tax which is an illegal activity that will attract regulatory attention and possible penalties. Your expectations of the accountant should therefore be of a kind that will not put you or your firm in any kind of jeopardy. Tread within the law and seek the services of an entity who has adequate experience, one who knows the system and the legitimate ways of keeping tax exposure minimum. Never settle for accountants who will offer services that subvert legislation or practices. It is possible to actually exist and operate businesses in a manner that will fetch reasonable profits and enjoy the profits without having to indulge in skullduggery or shady practices.
Look for an accountant who knows the system, and one who will keep your operations within the boundaries of legally accepted practices. A legitimate business will never attempt to cook its books. To sum up, choosing the right accountant for your business involves picking an agency that has the skills, the experience, the knowledge of relevant regulations in the jurisdiction of HMRC, the right resources, the flexibility, ethics and integrity to handle your accounts. Ensure that your data is secure and does not fall into the hands of competitors or potential competitors. A little data is all that is required to get the larger picture and establish strong competition. Organizations are known to mount business espionage activities on their competitors, and a good place to start is inevitably confidential information that is parked with third party service providers. Protect your interests and ensure that your partners have suitable measures in place to protect all data that is entrusted to them. While there are no rigid caveat emptor clauses that spell out the need for due diligence prior to entrusting accounting operations to an accountant or a firm, it is important to understand that it is as good as a caveat emptor, if not actually more than one. Choose wisely and enable your business to flourish.