In this blog we look at selecting an accountant to assist with your business compliance and reporting requirements.
In the age of specialism, this is an important decision as this assistance will free you to deal with other business or personal matters. Any misunderstanding of who does what or leaving everything to your accountant will lead to problems.
|Accounting tasks:||Listed from day-to-day items to annual items|
|Initial items:||Incorporating a company|
|Installing an accounting system (Sage/ Xero, QuickBooks etc.)|
|Ongoing items:||Day-to-day bookkeeping|
|Debt collection/ cashflow management/ internal reporting|
|Running payroll for employee salaries|
|Handling shareholding changes/reporting|
|Handling directorship changes/reporting|
|Annual Tax Return (for HM Revenue and Customs)|
|Annual Financial Statements (for HM Revenue and Customs and Companies House)|
|Companies House Annual Confirmation Statement|
(The line indicates BroadHead Accountants normal involvement).
2. Finding an appropriate advisor
Before consulting accountants, it is worthwhile trying to get an overview of their expertise. It is definitely worthwhile checking an accountant’s qualifications and/or professional memberships.
Speak to family and friends to get a referral to a good advisor. An internet search on their track record and seeking references is another good recommendation.
You may have accounting software in mind or already installed, and a quick check with an advisor they can support this software is useful.
Most accountants will provide a free no-obligation introductory meeting. I recommend talking with two to three accountants. In these meetings I suggest you ask a few technical questions. Do you get a plain English explanation or are you left baffled by the answer? A good advisor makes your life much easier and is easy to communicate with; but remember the responsibilities/deadlines remain with you.
Are the accountant’s fees fixed or variable?
When are these payable? How do this compare?
It is important to establish how often you will be in contact and whether you will correspond by email or telephone.
As an example of how I work I tend to be responsive to any day-to-day issues through the year (these queries are raised by clients). For the annual submissions I am very pro-active and will ask for the information to prepare these submissions. As such I have a reminder service for annual submissions, but clients track their own VAT reporting cycles. Check with your advisor to avoid any misunderstandings.
If you have a limited company, you should ensure any changes in shareholding/ directorships are recorded and communicated promptly to Companies House. If your accountant handles this update them promptly rather than leaving this for annual updating.
Empower yourself to check items are being processed correctly. Ask for workings back to check the financial statements agree to your source documents. Familiarize yourself with the online services of HM Revenue and Customs and Companies House. Assume nothing is filed until you confirm this.
5. Documenting the engagement
Once you have chosen an accountant both parties should sign an engagement letter.
This should address the obligations of both parties including the following items:
• The exact services to be provided, including any due dates;
• A fee estimate/quotation;
• Any warranties of performance;
• A complaints process; and
• How either party can terminate the contract.
Following these 5 simple steps will hopefully give you confidence to deal with the world of accountants. After all, an accountant is only human, honest.
X-Forces Enterprise (XFE)
Is an award-winning Community Interest Company that nurtures entrepreneurial ambition in the UK military community and are the official delivery partner to the governments Start Up loans scheme and the Careers Transition Partnership (MOD). XFE have supported over 1,300 entrepreneurs to start their own businesses and has helped thousands more through training, events and mentoring provisions. X-Forces.com