Hiring an accountant for your small business can be expensive, so you may wonder if you really require one. And what, beyond filing your tax return, do you need them for? In this article we’ll explain how an accountant can help, and share some tips for hiring the right one for you.
What can an accountant do for my business?
Accountants are often a valuable resource for a business. As well as expertise around tax planning and compliance, a good accountant can also help you with:
- Financial forecasting and planning
- Lease negotiations
- Cash management and cash flow
- Setting up bookkeeping systems
Read our guide to learn more about accounting services you might find useful for your business.
Finding an accountant that’s right for you
The best advice is to work with someone who really understands your business and its ambitions. A starting point for finding an accountant is to ask contacts in your industry for recommendations and referrals, but it’s incredibly important to keep an open mind. What works well for one person might not be right for another!
It’s tricky to hire an expert in an area you’re not familiar with, so your screening process should help you work out if they’re going to be a good fit.
Do they understand your industry?
An accountant who already has experience working with clients in your industry might be able to ‘hit the ground running’, as it were. Any good accountant will take the time to understand where your pinch points are, but someone who already has this knowledge might also be able to get you moving in the right direction more quickly.
Some industries, such as farming, are particularly specialised in terms of tax rules and allowances, so you might need an accountant who concentrates on this area, rather than general small businesses.
Other sectors, such as contracting, will have considerations around the Construction Industry Scheme or IR35 to think about, so a good awareness of this will be invaluable.
Don’t be afraid to ask any potential accountant about their experience in your sector, and to highlight any particular rules and regulations you should be aware of.
Are they easy to understand?
Tax regulations contain a lot of technical language. Find an accountant who can explain complex tax topics in an accessible and simple manner. A pro who helps you to understand financial topics will also be helping you to understand and manage your business in the process.
Can they handle your business needs?
Depending on the size, ambition and complexity of your business, you may require a strong team to dedicate themselves fully to your business’s needs and work directly with you on high-level business planning. Make sure whoever you choose is able to handle your present and future accounting requirements.
The acid test? If you’ve found the right accountant, six months in you’ll no longer be wondering if you need one and asking what they can do for you!
How to work with your accountant
Your accountant will normally go over the basics with you right at the start of your relationship, but it’s useful to know what you should prepare. We’ve put together a short summary of what you’re likely to cover with them.
- Deductible business expenses: A good accountant will carry out a full review of all your spending when they complete your accounts. This will help them make sure you claim for any costs as a business expenses. It’s also a good indicator of efficiency in the business. For example, if you’re spending too much on the ‘nice to haves’ when the business would benefit from prioritising something else.
- Upcoming changes to regulations: Most accountants will spend time familiarising themselves with new tax regulations – it’s their job! Good accountants will contact you when there are changes to tax regulations that will affect your business, informing you of any way in which you can use those changes to your advantage, or if they will affect you in other ways. Making Tax Digital is a good example!
- How your business’ legal structure affects your tax filing: The way you register your business has a big impact on how and when it pays tax, so check in to make sure you’re using the one which best suits your circumstances.
Working with the right accountant on a long-term basis can lead to faster growth and ongoing financial success, as well as less stress. It may require time, money and effort to get right, but in the long term it’s a business investment – and one you won’t regret.
Check out our accounting support hub for more help and resources, or to ask a tax question.
