From dealing with PAYE and VAT through to preparing accounts and statutory returns for self-assessment, you need a good accountant to help reduce your tax bill. If you choose poorly, you may find that your business suffers because someone is keeping you ill-informed of any penalties that you might be incurring. Here are 10 practical steps you can take to select the right firm to help with your accounts:
1. The best advertisement that a business will ever have is the one that its customers pass on through word of mouth. So ask friends and colleagues for the name of their accountant and quiz them for their views on the practice that they use.
2. If no one can recommend an accountant, or the names that you are given prove to be unsuitable, you could turn to the several organisations (details listed below) that exist to help and protect the public as well as regulate the accountancy profession. The main two are the Institute of Chartered Accountants in England and Wales (ICAEW) and the Association of Chartered Certified Accountants (ACCA). For Scotland and Ireland there are two separate but associated bodies to the ICAEW - the Institute of Chartered Accountants of Scotland (ICAS) and the Institute of Chartered Accountants of Ireland (ICAI). The Yellow Pages and Thomson Local directories also publish lists of accountants.
3. To be an accountant, you need only set up in business and call yourself an accountant. So whenever seeking help, it is worth making sure that the person you go to is professionally qualified.
The members of all of the organisations listed above have undergone training and examinations to join. They are professionally qualified and are bound to uphold the high standard of business ethics that their organisations maintain. Each organisation has its own method of supervising members and complaints handling should you ever have a problem. For members of the ICAEW, look for the letters ACA or FCA after their name; for the ACCA, ACCA; for the ICAI, ACA or FCA; and for the ICAS, CA.
4. You might find it helpful to prepare a shortlist with a minimum of two and a maximum of six practices that you want to call. Don't forget that if you ask too many, it will only serve to confuse your decision. At the same time as drawing up your shortlist, make a note of those things you want an accountant for. Do you want a practice that is large or small? Generally, the larger the accountancy practice, the greater the range of services. On the other hand, the smaller the practice, the more personal will be the service. Do you want your accountant to help with PAYE and VAT?
5. Now that you have your shortlist, call the practices to see whether they can handle your business, and ask about the areas they specialise in. Arrange an appointment if the practice seems promising - but before you go for a first meeting check to see if there are any charges for the initial meeting. Also, ask whether the person you are seeing will actually be your accountant.
6. With each initial appointment you will need to ask certain questions, such as whether the practice has any experience with your type of business. If so, try to get the names of these clients and call them.
Gauge how much interest the accountant shows in you and your business. How many questions do they ask of you? Test them to see if they understand your business. If they do not, how can they help you? Does the accountant seem to agree with everything you say, or are they willing to point out where you are wrong?
7. A good accountant will be able to help you manage and control your business's finances. However, you should guard against giving anyone, accountant or otherwise, sole control over the company chequebook. Beware of the accountant who suggests giving them access to your money.
8. Before committing yourself you should check on the billing arrangements. Some firms will want you to pay a regular amount on a monthly basis, others may do the work and then bill you when your accounts are produced. While you are at it, check to see how the bill is worked out - ask for the firm's hourly rate and an itemised bill. You might find it useful to ask a set of questions at each meeting so that you can compare the results. For example, what is their minimum charge for audits? And will they give you any help on how to keep your bill down?
9. The organisations mentioned publish free guides that give practical advice on the various options facing those in business and how accountants can offer expert guidance.
10. If you have a problem, it is always worth telephoning the organisation that your accountant belongs to first before formalising a complaint. The procedures vary from organisation to organisation, so you ought to ring for help in determining your next step.
The Institute of Chartered Accountants in England and Wales, PO Box 433, Chartered Accountants Hall, Moorgate Place, London EC2P 2BJ. Tel: 020 7920 8100. Website: www.icaew.co.uk
Complaints to: Professional Conduct Department, The Institute of Chartered Accountants in England and Wales, Gloucester House, 399 Silbury Boulevard, Central Milton Keynes MK9 2HL. Tel: 01908 248100.
The Institute of Chartered Accountants in Scotland, CA House, 21 Haymarket Yards, Edinburgh EH12 5BH. Tel: 0131-347 0100. Website: www.icas.org.uk.
The Association of Chartered Certified Accountants, 29 Lincoln's Inn Field, London WC2A 3EE. Tel: 020 7242 6855. Website: www.accaglobal.com.
Complaints to: The Legal Secretary, at the address above.
The Institute of Chartered Accountants in Ireland, 11 Donegall Square South, Belfast BT1 5JE. Tel: 028 9032 1600. Website: www.icai.ie.