If you’re like most small business professionals then the following topics will not be your strong points and your eyes may glaze over at the very mention of them.
But they are all important to the future success of your business enterprise.
An accountant may seem an expensive luxury at first glance, but a year down the line they should prove to be money well spent. Equally, you may want a bookkeeper instead of, or as well as, an accountant.
Most people do one of the following when looking for an accountant:
- Ask friends and family
- Ask a solicitor, banker or business associate
- Search on the web or in a telephone directory
These are all good starting points but it is critical to also be clear about what you want from an accountant before you appoint one. It might be difficult to identify what you want or know if you’re new to business, but it’s important to try, otherwise you’ll waste money engaging an accountant who cannot do what you need.
You may want services such as annual accounts, tax returns, payroll and VAT returns, or advice on registering and paying VAT, deductions you can claim for using your car for business and your home as an office, how to keep your taxes to a minimum generally, how best to structure your business purposes, how to build your business, general business advice, and so on.
If you only want advice on tax matters you may choose to use a tax advisor rather than an accountant. Equally, you may want to use a bookkeeper in addition to an accountant, or you could get the accountant to show you how to do the bookkeeping yourself.
You may not know which services you’re going to need before you start speaking with an accountant. The one thing you cannot afford to do is to go for the cheapest option – at least not until you’ve made sure that you’ll get all the services you need.
You might be surprised to learn that anyone can call themselves an accountant or bookkeeper even if they have no professional qualifications. So you cannot afford to make any assumptions when you speak to an ‘accountant’.
It’s invariably safer to rely on professional advice than the advice of a friend who’s always bragging about how he gets one over on the taxman. Using a professional advisor gives you a degree of credibility.
The taxman knows the advisor isn’t going to be ‘cooking the books’, so you should be at less risk of tax enquiries and investigations. Having said that, the taxman (HMRC) is changing the way he works and asking questions by reference to a range of factors, so having a professional advisor is no guarantee that the taxman will leave you alone.
Your accountant needs to be your business friend. Whoever you choose, make sure you get on with them and can trust them implicitly; the wrong person could cost you dear.
Obtain a free guide containing more tips and advice on finding, choosing and using an accountant from our website.
The author is founder of the Tax Advice Network and a former chairman of the ICAEW Tax Faculty.
