Accountants can help out at various stages during the growth of your business. They can handle much more than just your payroll and tax returns. So when should you consider hiring an accountant for your small business?
What to look for?
There are good reasons for hiring an accountant at different stages of your company’s growth. From a business plan to company formation, loan application to a tax investigation, an accountant can make life easier for you at each step. When meeting with a potential candidate, it boils down to asking them the right questions, otherwise, you may end up with just another PR pitch.
Could my money work harder?
Many believe an accountant will just be looking after annual accounts and tax compliance. However, this is only small portion of what a good accountant can do for you.
A good accountant will help you to create a business plan, raise capital by finding grants, government funding pots, tax relief schemes and advise every step of the way. Many people only ask their accountants to balance the books when they should really be asking questions like “what I am entitled to that I don’t know about?
The money an accountant can save your business must naturally be weighed against the costs of employing them. Another question you should consider is “why should I pay you to do this?”
When it comes to asking about an accountant’s fees you must ask “how much will this cost?” Another important question to ask is when you will be billed “when will you bill me? Some charge annually, monthly or hourly. Talk money up front before you commit to anything officially.
Finding the right match?
As well as having prestige, it’s important they understand small business needs and are able to offer relevant insight. That’s why it’s so important to ask an accountant if they work with small businesses, or have expertise in your sector. It might be worth finding a firm a similar size to yours.
Accountants offer differing levels of engagement, so make sure to establish how often you’ll be in contact, and whether you’ll correspond by email or telephone, advises Lewis. Less contact often means fewer costs, but can make it difficult to ask questions or spot issues.
Ask who will be dealing with your account on a day-to-day basis. You’ve got to be satisfied that you’re not being palmed off to the office junior; that the person in charge of your case understands your business.
Are things working out?
Once you’ve chosen an accountant, a great way to measure their performance is to hold monthly meetings where you can ask for their view on the business and its finances. If their view is close to yours, that’s a good sign, but ideally, you would like to see some initiative as well.
A good accountant is one that is proactive and asks you the right questions as well. They should be asking if you have any issues, questions or concerns to discuss. If they’re not doing that then they’re not doing the job properly.
The best relationship with an accountant is one that is defined by ongoing conversation and information sharing which leads to trust. The more you share about your business, the more you will get out of the relationship.
For businesses in sectors with specific tax rules, it’s crucial. Rules for most other business are largely the same, so you’ll just need to find an accountant with a good track record of working for small or new businesses.