Accountants range from people who do basic bookkeeping to those who offer specialist business advice. You may simply want them to simply prepare your financial statements for your year-end tax return, or you might want someone who can offer you expert start-up advice and provide an auditing service.
Have a good think about what your needs are. If your business turns over more than £5.6 million, it’s subject to an annual audit – which needs to be completed by a registered auditor. Even if your turnover is rather less than that, it may be more cost-effective to get a professional in, rather than waste days agonising over your tax returns when you could be spending that time running your business.
5 steps to success…
1 Get the right person
Don’t just turn to A in the Yellow Pages and start from there. Choosing an accountant is an important decision – make it the right one by doing a bit of groundwork. First of all, don’t just be swayed purely by their use of word ‘accountant’ – make sure you employ someone who is a member of a recognised body, such as:
• Institute of Chartered Accountants in England & Wales (ACA or FCA after their name)
• Institute of Chartered Accountants of Scotland (CA)
• Association of Chartered Certified Accountants (ACCA or FCCA)
• Association of Authorised Public Accountants (AAPA or FAPA)
• Association of Accountancy Technicians (AAT)
2 Word of mouth
As with many things, the best way to choose an accountant is by personal recommendation – from friends, colleagues or even your bank manager. Make sure you ask for references and follow them up. If you’re looking to raise money externally, it may be worth hiring a trusted, well-known firm whose involvement may help instil confidence in your proposals. Once you’ve got some recommendations, draw up a short-list of about six and arrange to see them.
3 Quiz them
Some key things to ask include:
• What experience do they have of your type of business? Do they have other clients in your sector?
• What are their charges? What do they cover? Can a fixed-fee be arranged for the first 12 months?
• Does the practice have any specialisms? What extra services do they offer?
• Who will be looking after you – a partner or someone more junior?
• How can they help develop your business?
• What level of access will you be given to the data held about your business? This is important as you might need it to update your business plan or if you change accountants.
Be clear about what you want from your accountant, how much work you need doing and what the costs involved are. Take your business plan along and see how interested they are in your company. Make sure you are satisfied you have the right person for the job. Get written estimates of the costs of work before the work begins.
4 Once you’ve chosen
When you appoint an accountant, they should send you a letter of engagement. This should include your responsibilities, their responsibilities, their fees and how they’ll be charged. From then on, keep in close contact with them – get the best out of them. Remember to keep them informed of any changes in your business, and keep to your end of the bargain by meeting deadlines or keeping the agreed records. Review the relationship every three to five years – and make sure they’re still the right person for the job.
5 If there’s a problem?
If you need to make a complaint, you do so to the professional body your accountant is accredited with. But if you need compensation because you’ve lost money as a result of their misconduct, that’s the time to bring in another expert and seek legal advice.
Recruiting new staff
Whether you are looking to replace staff that have moved on or are expanding the size of your finance department then access to the AAT students and members is invaluable.
You can reach this audience through the following means:
• Advertising in the official monthly magazine of the AAT, Accounting Technician and on its website.
• Direct Mail which can be sent to sectors of the AAT membership (subject to terms and conditions)
• Events – you can support local events in your area aimed at either prospective students and qualified AAT members.
Want a career move to accountancy?
When you train as a chartered accountant, you train as an all-round business professional. Training is tough and firms will not offer you a training contract unless they believe you can succeed.
Examination results consistently show a clear correlation between past academic achievements and success in the Institute’s professional examinations. You will therefore need a good academic track record in order to convince prospective employers of your ability to study. Although a degree is not a prerequisite (you can also enter the profession directly from school after A levels or on completion of the AAT), nearly 90% of the 4,000 or so students entering training contracts each year are graduates.
* Audit: Audit is at the core of accounting work. Accounting auditing careers involve checking accounting ledgers and financial statements within businesses, public and not-for-profit organizations. Being increasingly computerized, this work can rely on random sampling methods. This provides a solid foundation to future specialist work, as it really enables you to understand how an organization makes money.
* Budget Analysis: A budget analyst develops and manages an organization’s financial plans. Many jobs exist in government and private industry. You’ll require strong quantitative skills for this work, along with good people skills, because you’ll be involved in negotiations.
* Financial: Financial accountants draw information from the general ledgers to prepare financial statements. They also take part in the business’s important financial decisions involving mergers and acquisitions, employee benefits planning and long-term financial projections. This work can very from week to week, so needs a combined understanding of accounting and finance.
* Management Accounting: Management accountants work in companies and contribute to decisions about capital budgeting and business analysis. Major activities include cost analysis, contracts analysis, and participation in efforts to control expenses. Management accountants are now major contributors to business decisions, working alongside marketing and financial managers to develop new business.
* Tax: Tax accountants prepare corporate and personal income tax statements. They also prepare strategies for deferring taxes, when to expense items, how to approach a merger or acquisition, etc. You need to have a thorough understanding of economics and the tax code. Many large firms now also look for legal knowledge.