Finance & Funding

Choosing a Good Accountant

Anyone can call themselves an accountant or a book-keeper, whether they have qualifications or not. So how do you go about making sure the accountant you choose is the right one for you?

Who's who

First you need to know who is who in the world of accounting. There are a number of different types of accountant and it can be confusing.

• Financial accountants tend to focus on producing the financial records required by law.
• Management accountants focus more on interpreting the financial data and turning it to good business use.
• Tax accountants specialise in reducing your tax liability as far as possible.
• Insolvency accountants are qualified to handle firms going into liquidation - they are regulated by law and are not allowed to practice in this area unless fully qualified and licensed.
• Audit accountants are qualified to audit company accounts (necessary for companies with a turnover of more than £5.6m per year). They too are regulated by law and can only practice once licensed.
• Accounting technicians have not studied at the higher level but are proficient at book-keeping and other aspects of financial accounting. Self employed accounting technicians do offer lower-cost accountancy services for small businesses.

Recognised accounting bodies

Since anyone can legally call themselves an accountant, without any qualifications or accreditation (except those practising in insolvency and auditing), you need to make sure that you are working with someone who belongs to a recognised body.

The recognised bodies set stringent standards. Members must be educated to a certain level, complete studies, examinations, test and audits. Only then can they become certificated, become full members of their association, be licensed to practice by their body and to be allowed to put the appropriate letters after their names. The most common bodies in the UK are:

• The Institute of Chartered Accountants (designatory letters ACA or FCA after their name)
• the Association of Chartered Certified Accountants (ACCA or FCCA after their name)
• the Chartered Institute of Management Accountants

Account technicians do not study at the higher, degree equivalent level. Competent technicians have, however, studied with the Association of Account Technicians and can put MAAT after their name.

There is virtually no difference in competency and level of qualification between ACA, FCA, ACCA, FCCA, ACMA or FCMA accountants. Those that belong to internationally recognised bodies have AIAA or FAIA after their name. Those that specialise in public finance and accountancy (for government, local authorities etc) put CIPFA after their name as they belong to the Chartered Institute of Public Finance and Accountancy.

Make initial contact

The first step is to contact between three and six firms with an initial enquiry.

To decide who to contact look in local directories, on the Business Link website, and on the websites of the professional bodies described above. It is also a very good idea to contact your local chamber of commerce. Best of all, try to get a recommendation from firms similar in size and type to yours, since the only way to really know how good someone is, is to work with them.

It helps if you've already decided what you want from your accountant - just a book-keeper who will help you keep records, pay your staff and file your returns or do you want a more rounded management service, where the accountants will provide some business and financial direction? Or perhaps you only want business advice, and want to keep the books yourself. If you aren't sure what you're after, then be honest. Explain what you're looking for as a minimum, but say you may also be interested in other support and services they can give you and you'd like to be advised.

Narrow it down to three

From your initial telephone conversations, make appointments to see at least three firms in person. Check that these initial visits are free - they should be, since this is just to ascertain whether you are going to give them your business. Ask that the initial appointment is, at least partly, with the person who would actually be handling your account. You're hoping for a long term, supportive relationship. You need to know that you can get on with, trust and relate to the person you would actually be working with.

At your interview there are a number of things you are looking for:

• their level of qualification - check for membership to one of the bodies described above.
• their size - smaller firms may have more time (and understanding) for smaller clients. On the other hand, bigger firms may have more skills and may take a more professional approach.
• their understanding of your business type and sector. Do they have other clients like you, your size and type?
• their approach - unless they are just keeping your books for you they should want to know as much about you as you do about them. What is their approach? How do they get to know you? How will they offer you a fruitful relationship?
• pro-active style - will they prompt you for information they need, or to remind you of approaching deadlines, new legislation etc.
• support - will they look at what you do and suggest ways to do it better? Both in financial management and business management?
• specialist services - will they offer you tax, estate planning, raising finance or other specialist services.

Also check the following:

• who will be dealing with your account? Ask to meet them - you need to know you can trust and get on with them.
• fees - how will they charge you: per month, per annum, per job? How do they work out their fees? What extras are you likely to have to pay for? Ask them to quote for the first year's fees.

Last, but not least, technology

Financial technology is so advanced and so widespread now that even tiny, micro firms use it. Software like Sage and Quickbooks, to name just two, can give you instant access to your financial management information all year round and help cut the cost of your accountancy fees by pre-preparing a lot of the information your accountant needs from you. But you are likely to need support to choose the right software for your business, to start using it and to get the most from it.

Make sure your accountancy firm is technically savvy and extremely familiar with these programs. Think twice about using them if they are not. Many accountancy firms are now re-sellers of this type of software and they, not the software company, may well provide the first level of support to users. They may also offer training days and events.

Accounting software not only streamlines your book-keeping and provides you with instant management data, it also provide you with customer relationship tools and supplier relationship tools, making it easy for you to keep track of your customers and suppliers, contact them and know their preferences.