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How to Make Your Accountant Really Work for You and Your Business

Your accountant should be one of your most trusted business advisers, so establishing an effective working relationship is vital.

An accountant in consultation about a business loan

We’ve all seen the depressing statistics on business failure rates in the UK: according to the Office for National Statistics (ONS), almost 60% of new businesses fail within the first five years.

It’s therefore surprising that most SME owners seem to treat their accountants as glorified book-keepers rather than valued business advisors. Making the right decision when choosing your accountant can give you access to expert advice and significantly improve your chances of success.

In this article, we look at how you can make sure your working arrangement with your accountant is a profitable one. 

Do your homework before choosing your accountant

Think about what you need from your accountant. Do you just need a book-keeper, or are you also seeking a tax adviser, financial adviser or general business adviser? Maybe you handle day-to-day bookkeeping and payroll in-house, while using your accountant for more general advice.

These considerations can all influence who you choose, as they will dictate whether you need an accountant who really understands your industry and business model, over and above the minimum level of technical knowledge and experience.

Do your homework on prospective candidates. Before you engage anyone, check them out on professional sites such as VouchedFor, and ask them for testimonials from previous clients.

Have an initial conversation with them to see whether you think they’re a good fit for you and with your business. Treat this as if you were interviewing them for a job. Find out if they have experience in your business sector, and be prepared to speak to several candidates, if necessary, before engaging anyone.

While all accounting firms need to provide transparent fee quotes, don’t simply choose the one that provides the lowest quote. We’re not saying you need to pay through the nose for one of the Big 4 accounting firms (PwC, Deloitte, EY and KPMG) – not in the early days, at any rate.

But do take the time to speak to a few accountants, and try to find the best fit for your business. This means finding someone who understands you and your business, who shows interest in helping you to achieve success, who has some experience in your field. You should never mind paying a bit more for someone who can add real value to your business.

And finally, once you think you’ve found the right firm, make sure you obtain a Terms of Reference letter, or a Scope and Schedule of Services, before you appoint your accountant – this would be a formal document setting out the terms and conditions of the services the accountant will provide.

During the relationship

Make sure you communicate regularly with your accountant. This can be through emails, phone or video calls, or face-to-face meetings (remember those?). This will help your accountant to remain engaged with you and your business, and may help to alert you to any possible problems at an early stage. We don’t just mean financial problems that your company might be experiencing.

We also mean where you might be handling your own day-to-day book-keeping, but perhaps not doing it in the best way. Then when it comes to your financial year-end, or when you might want to make an application for business finance, it can be quite difficult and time-consuming for your accountant to unpick your accounts and prepare things properly, if your books are in a mess.

Your accountant should also make you aware of any changes in legislation and regulations that are relevant to your business.

For example, during the coronavirus pandemic, the better accounting firms have been keeping their clients updated regularly with developments such as the various furlough schemes, funding support schemes for businesses such as CBILS and BBLS, and so on.

But communication is a two-way street. You should also keep your accountant informed of what’s happening within your business. Are you planning any expansion or other strategic changes? Are you considering a new business location, a new overseas market, or an acquisition or sale?

Do you need commercial finance? If so, have you explored all the different funding products that may be available to your business? Have you explored asset finance, invoice discounting or factoring? Do you have personal assets such as property that will give you many more (cheaper) options to raise finance for your business? Your accountant should definitely be able to help you explore your options, as will a reputable commercial finance broker.

What about your own income? Before you take any funds out of your business as dividends, salary or drawings, has your accountant explained the tax or other implications of doing so? 

Again, the better accounting firms will be able to provide advice to you as an individual, not just to the business itself. They may charge you more for doing so, but it’s important that you understand how you are impacted personally by the company’s decisions and actions.

The Final Word

When you’re hiring key employees for your business, you look for people who have the necessary skills and experience, and who you think will be a good fit for your team.

Choosing an accountant is no different. If your business is going to be one of the 40% that does survive longer than 5 years, you’ll be working together for a long time. So find one that can as much value as possible to your business. They’re worth their weight in gold. Well, almost…


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