5. Make sure they’re part of an official body
With the range of accreditations out there in the market it is extremely difficult to work out which ones matter. If you are a limited company, you only need an audit at around 6.5m turnover that has to be done by ACCA or ICAEW members as these are recognised auditors. There are no audit requirements as such for a sole trader or a partnership.
(But do not be persuaded by accreditations alone refer to all of the above and check out the accountant).
6. You get what you pay for
Accept that you will only get what you pay for, so if you only want quarterly catch-ups, PAYE and annual returns, Self-Assessment work could be completed by an accountancy technician who is likely to be cheaper than a Chartered or a certified accountant. Both can do the work but the ACCA and ICAEW members are more qualified so likely to be more expensive.
7. Get a quote and shop around
Part of my job is to reduce overheads and amazingly I have reduced accountancy bills from between 10,000- £20,000 down to 3,000-4,000. When I ask why they paid so much, they were often told accountants charge by the turnover. In fact, what is relevant are the hours of completed work and this has nothing to do with the turnover. Check the workload and ask for a quote on that basis and shop around.
8. Ensure they check things often
Taking dividends may be the most tax efficient way of taking money from your company but it does bear risks for smaller companies especially one man companies. Ask your accountant what they will do to make sure you do not run into problems with taking too much from the company. How often will they check the profitability with you
9. Get and give regular updates
Communicate regularly – Make sure you plan ahead for VAT and do not depend on your accountant to tell you to do this. Companies often enter liquidation needlessly, simply because there was a lack of effective communication between the directors and accountants.
It is worth remembering that you are responsible for your companys tax affairs and not your accountant so having the right one working for you is very important. You also have a legal obligation to keep your tax affairs in order so do not throw any relevant financial information away, including bank statements, for at least six years.
To get the most out of your relationship with your accountant, you should be able to regard them as your business adviser. If they provide you with historic information alone (this cannot be defined as business advice) they may not be the right business partner for you.
Mike Smith is director of business debt specialists Jameson Smith & Co.