10 things to check when you hire an accountant
When you start a new business (whether you set up as a company or a sole trader), it’s easy to discount your need for an accountant. After all, your main focus will be building sales. And rightly so. Without sales, you have no business.
Doing your own accounts can save money. Or so it seems. You stay up late in the evening doing your books, the additional time feeling justified as you’re a small business. At least you’re saving an overhead.
But what are you losing?
Nobody can do everything. Smart businesses (even small ones) invest in professional accountants for good reason.
Firstly, it avoids risking fines and penalties from incomplete accounts or late filings. For example, failure to file your annual return with the Companies Registration Office (CRO) in Ireland could result in a fine of up to €1,200. And the cost of losing audit exemption is potentially much greater. You don’t need sleepless nights about this.
Secondly, experienced qualified accountants know their stuff. This can help to reduce your tax liability and even grow your business. For example, one of the biggest risks for small businesses is revenue compliance: ensuring your VAT, payroll and other taxes are accounted for correctly. Plus, you need to know what expenses you can claim to ensure you maximise your reliefs. Accountancy is much more than bookkeeping.
Hire an accountant and you won’t just regain your evenings. You’ll relax in the knowledge they’ve got your back, leaving you to focus on your business.
How to hire the right accountant for you
Don’t skimp on research when you’re making this important decision. It’s a big one. You’ll work with your accountant for years. You’ll need their advice and you’ll need their support.
Choose well and it’ll reap rewards. Here are ten things to check before taking the plunge.
1. How much does hiring an accountant cost?
Like all professional services, you’ll find expensive and cheap options. I’m sure you know the phrase: “If you pay peanuts, you’ll get monkeys.” There are many negative reviews of accountants online, often talking about hidden extras, poor service, and missed deadlines.
Establish a budget for your accountancy support and consider what services you need. This will include work such as bookkeeping and tax returns, but it could also include strategic planning and specialist advice.
Next, get quotes from three shortlisted companies.
Larger accountancy firms (such as the top 20) offer a high level of expertise with many specialists in-house. But they might be outside your budget. And if you’re likely to be a smaller client to them, you could spend most of your time talking to a manager and not a partner.
It’s important to choose an accountant who matches the needs of your business. Being a small fish in a big pond can be frustrating.
2. Where is the accountant located?
You might prefer having face to face meetings. If that’s the case, you’ll want an accountancy firm within reach of you.
Most people are happy to hire an accountant who’s not on their doorstep. Phone calls and video meetings suffice. So long as there’s good quality communication, the relationship will work.
My accountancy practice is based in Ireland, and whilst I have a few clients popping in, the majority talk to me remotely. It saves them hours travelling to attend meetings (you’ve got a business to run) and is far more cost-effective.
Technology provides freedom to choose the right accountant for you, regardless of their location.
3. Who would your friends or colleagues recommend?
When you’re providing financial information to a third-party, you need to feel confident. Will they keep it secure? Can you rely on them?
For that reason, asking for recommendations is a good idea. You might know someone else in business who’s had a great experience with their accountancy company. Or a friend might be able to suggest someone they know.
When it comes to hiring an accountant, word of mouth can be helpful. Just make sure you’re comparing like with like. The service another business receives might be different to what you’re looking for.
Use your recommendations alongside my other nine points. In this way, you’ll hire the right accountant for you.
4. Does the accountant seem interested in your enquiry?
Have you ever made an enquiry, only to wait many days to get a response? You probably (rightly) assumed they weren’t particularly interested. You probably looked elsewhere.
We can learn a lot from how people react to our first approach. Accountancy is no exception.
Assess how quickly each prospective company replies to your enquiry. Consider their attention to detail as well:
🔷 Do they answer ALL your questions?
🔷 Do they offer you sufficient help at this stage?
🔷 Do they seem genuinely interested in your business?
This helps you understand how keen they are to work for your business. If the response is sloppy and brief, my advice is to keep looking.
Beware the honeymoon period too. Accountants that get you in the door, only to lose enthusiasm and develop a slow dialogue. If your gut tells you it’s not going well, it probably isn’t. Bail out and keep looking.
5. Do they have the expertise you need?
Many respected accountancy membership bodies exist. For example, I’m a member of the Institute of Chartered Accountants in Ireland. Using the initials FCA proves I’ve been a member for at least 10 years. In my case, much longer.
But the experience of a single accountant in the company might not suffice. You could need specialist tax advice or the support of a VAT expert. If you hire a large accountancy firm, these specialists work in-house. But given the higher costs of such firms, you’ll be paying to have experts on standby, just in case.
My accountancy business takes a different approach. We don’t employ specialists because you don’t need them all the time. But we do involve trusted experts when necessary. In this way, you ‘pay as you go’. Your standard accountancy services are more cost-effective and specialist advice is on hand when you need it.
It’s a better system for most smaller businesses.
6. How well does the accountant communicate with you?
It’s no exaggeration to say communication is critical, whatever service you’re hiring. The better both parties understand each other, the better the outcome.
Not everyone is a natural communicator. But you’ll know from your own business that if you keep in touch with your customers, the results are generally favourable.
Talk is everything.
Do you know someone who’s changed accountants? Ask them why. I’d bet my last Euro poor communication was part of the reason. Perhaps they had to chase for a response. Or they were landed with surprise charges. It all comes down to communicating properly.
So, from the start of your contact with a prospective accountant to hire, assess their communication with you.
🔷 Do they respond to your contact within 24 hours?
🔷 Do they answer your questions fully?
🔷 Do they clearly explain what their process is?
Your alarm bells should be ringing loud and clear if there are problems at the outset. A sluggish response to an email could mean a delayed response to an important request in months to come.
Communication problems can also develop when your initial contact passes you to someone more junior once you’ve hired the company. So, ask who you’ll be dealing with day to day, and get to know them before you decide to go ahead.
7. Could you trust the accountancy company?
With accountancy, a trusting relationship is essential. You must feel you can rely on your accountant, come rain or shine. Without trust, the relationship will fail, and your business will suffer.
From day one, you should feel you’ve met someone you can trust. Someone you can have an honest and professional working relationship with.
How do you know they’re trustworthy?
Here are a few things to sense-check this and reduce the risk of making a wrong decision:
🔷 Ask the accountancy company for testimonials (I’ll cover this below)
🔷 Check their membership of accountancy bodies
🔷 Google them. We all have a trail online
Over time, the trust you have in your accountant will grow. You just need some confidence at the outset that you’re heading towards a constructive relationship.
8. Ask your shortlist for client testimonials
There’s nothing better than hearing what their clients think. It’s a great way to make a considered decision when hiring an accountant.
Some accountancy companies offer testimonials on their website or provide them on request. Whilst you could email their references, I thoroughly recommend picking up the phone.
An email lacks tone. A five-minute call will give you a better idea whether the client is happy with their accountant. And most businesses will do this for you. It’s also easier to ask particular questions on the phone, gauging the tone in their response.
Take the time to act on client references. It could make or break your decision.
9. Review their presence online
There’s nowhere to hide online these days. Good job, I reckon. Assess each potential accountant online. They might not have a huge shiny website, but they should provide you with the essentials. Does it tally with what they’re telling you?
Have a look on social media too. Read their posts. Check out employees. See what articles and advice they’re posting.
Finally, just Google them to see what comes up. Features in the news, charity fundraising, it’s all great background for your important decision.
10. Will they have capacity to serve you well?
Finally, discover what capacity your potential accountant has. If you hire them, will you have to wait months for any support? Will you be a large or a small client to them?
Nobody wants to be a Friday afternoon job.
The only way to establish their capacity is to ask. But how they respond to this question (best asked verbally) will give you a good insight into how important your business will be to them.
I know there’s a lot to think about. But, when you hire an accountant, it’s a big decision. If you consider my ten points before you sign up, you’ll have a much higher chance of enjoying a supportive and rewarding partnership.
One that will help your business grow. One that won’t keep you awake at night.
My accountancy business helps many small and growing businesses with their accounting and tax needs. Would you like a chat? Please just get in touch with me.