15 December 2020
Effective management of your finances is key to making your venture a success 🎉 - no matter how large or small. It's a fundamental element, the importance of which can't be overstated.
Among the key decisions to make in this area is whether or not you need to engage the services of a professional to manage it for you in the first place. And if so, how should you go about finding the best accountant or bookkeeper to suit your business' requirements?
Many people believe accountants are only for big businesses, and that freelancers and SMEs are better off taking care of their finances themselves. The recent rise of ever more simplified, digital and automated cloud accounting software has made this school of thought even more prevalent. With firms like Xero and Quickbooks leading the charge, it's now portrayed as having never been easier to manage your business finances. It's so easy you can do it on your mobile too!
Unfortunately, that's not always the full story. For instance, you might feel differently about this 'simplicity' after you’ve spent days trying in vain to navigate the complicated, nuanced world of tax returns.
Spending hours trying to match receipts to expenses to the bank transaction so you can reconcile a payment, re-bill it to a client, and reclaim the tax, is probably not the best use of your time. It sounds like a responsibility we'd want to give to someone else, or, you know, automate.
Moreover, in business, time really is money. How much time could you save having an accountant to help you with a subject they know inside out? Something that might take you 16 hours or more to do yourself, could be done by them in one or two.
So the real question to ask is: How much is two working days of your time really worth? What else could you have accomplished in that time?
What’s more, hiring an accountant doesn’t just mean getting someone else to do the hard work for you. It makes business sense as you're making or saving money on multiple fronts.
On the one hand, as we've noted, you save your time to pursue more valuable business-growth activities.
On the other hand, it can also be a great way of saving money more directly - as their knowledge will ensure that you are taking the best financial approach to your business.
For instance, helping you become more tax efficient or recommending useful apps that streamline your processes.
After all, it's in their interest to help your business! The more they do that, the more chance you have of continuing a long, fruitful, and mutually beneficial partnership. Knowing you need an accountant is the easy part, now you've got to find one!
The first step in finding the right accountant for your business is to identify any specific requirements you will need from them. For example, do you want one that's local who you can meet face to face? Or is it enough for them to just deal with you online? Do you need an accountant with some industry-specific knowledge, such as property or exporting?
Also, do you want accountants who will take care of absolutely everything relating to your business finances, or would you rather save money by completing some basic accounting yourself? Perhaps you feel you only need tax advice, or advice on specific changes to the law that affect your operations.
You may also want to consider if they are technologically savvy. We've written before about the benefits of businesses adopting technology, and the lessons are no different for accounting firms. Are the accounting software & tools they use ones you are already familiar with? Are they able to recommend additional services that will really help you, from the myriad of choices available?
Have they gone digital, embracing the cloud? These days, it is becoming increasingly common to use cloud technology to give your accountant real-time access to all the data that they need. A digital accountant will allow you to streamline much of your accounting process. And means you can expand your search area to find the service, and price, that best meets your needs.
These are just a few of the questions you should be asking yourself before embarking on a search. The answers will help you narrow down your search and allow you to quickly screen candidates.
Having answered the questions above, you should have a much clearer idea of what you’re looking for.
A good first step is to consult your networks for recommendations. People are unlikely to recommend something they don't believe in, so if someone you know can vouch for an accountant, it'll take much of the anxiety out of the equation.
However, when taking recommendations, it is also important to consider why your contact chose that accountant in the first place. If you're looking for someone with experience in your field - you would have to be wary of any recommendations from businesses very different from your own.
Another area to consider looking is on the websites of finance or accounting software providers themselves. Many of them maintain partner programs that, at the very least, can be a filter for accountants that are well versed in the software you are using. Business directories, industry bodies, and even a very specific web search can all yield a good number of accountant candidates for your business.
Once you’ve narrowed down a shortlist of candidates, there are some important questions to ask in order to make sure you’ve got the right person for the job. For example, do they have ideas on how to make your money go further? What will they need from you going forwards? How often will they communicate with you?
Generally speaking, it’s good to chat with a few different accountants and compare their services and fees. But remember, you get what you pay for. Fees should be low on your list of priorities (and only a differentiator when you have two equal services). In any case, a good accountant should be saving you far more than they cost.
Finally, make sure you check any social media as well as review sites like TrustPilot before making a final decision.
Ultimately, finding an accountant should be treated almost like hiring a full-time employee. They'll be an essential part of your business after all, so it’s well worth spending the time finding the right one.
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