Top 10 tips for choosing a limited company accountant

Most small limited company owners say their accountant is their most valuable advisor; a good accountant will keep your books in order, help with tax planning, and ensure you meet all your tax deadlines.

New research shows that SMEs who use an accountant boost their revenues by 11.5% on average!

Here are some tips from the ByteStart team to help you choose the best accountant.

How to find the best limited company accountant

1. Research your options early on

Consider choosing an accountant before you start your business, or as soon as you can, as they will be able to advise you on start-up expenditure, and how to register with the tax authorities. They will also be able to form a company on your behalf, register you for Corporation Tax, VAT, and set up your payroll if this is the route you want to take.

2. Make sure your accountant is qualified

Make sure that all prospective firms are regulated. Most firms are members of a recognised accountancy body such as the ICAEW (Chartered Accountants), ACCA (Certified Accountants), or ICAS (in Scotland).

3. Use a small limited company specialist

Make sure your accountant has experience of dealing with other small businesses, particularly other businesses within your industry. If you are a contractor or freelancer, for example, you will typically be better off talking to a specialist contractor accountant rather than a ‘general’ firm, as there are specific tax laws you will need to be aware of, such as IR35.

4. How much will your accountant cost?

Find out what fees your accountant will charge. Are they annual fees, or monthly? Are there any entry or exit fees? How much will extra work be charged at – if it falls outside the agreed tasks to be performed for your business? Will they charge any ‘catch up’ fees if you move from another accountant before your company year-end?

5. What services are included?

There are a number of core duties all accountants should carry out (such as setting up a payroll, completing your company’s annual accounts if you run a limited company, accounting for VAT, dealing with HMRC, etc.).

Will they also complete your self assessment returns (essential for a sole trader, but if you’re a director, this is a personal cost), provide references for mortgage / letting purposes? Do they provide IFA services?

6. Talk to several accountancy firms

Always contact several firms when choosing an accountant. You should get a feel of what it will be like as a client from your initial dealings with each firm. It is essential that you feel like you can build a good relationship, so your intuition will be the best guide at this stage. Ask if you can meet each accountant and discuss your needs before signing up.

Take a look at our list of small business accountants as a good starting point.

7. What size of firm are you comfortable dealing with?

At ByteStart, we often find that smaller firms of accountants tend to understand the specific needs of smaller companies, and can often be more ‘reactive’ than larger firms.

This is very much a personal decision, however, and you’re likely to get a ‘feel’ for one of the accountants you contact.

From personal experience, we suggest you avoid the larger ‘factory line’ accountants if you’re a professional contractor; profit is the key motive for many of the big players rather than keeping clients happy.

8. Communication

From our experience at ByteStart, our biggest problems with accountants involve poor communication.

Your business could face penalties if paperwork isn’t returned to the authorities promptly, and waiting days for a reply to a tax question can also be very frustrating.

9. Technology

Does your accountant work with all of the leading online accounting software packages, such as Xero, Sage and FreeAgent?

This type of software has revolutionised life for both accountants and their clients. It has never been easier to keep your accounts up-to-date and view the status of your payments and tax liabilities instantly.

If an accountant hasn’t adopted cloud software, they are best avoided. Ironically, thanks to cloud accounting software, it has also never been easier to switch accountants.

10. Recommendations from someone you trust

One final piece of advice is to ask other small business contacts if they recommend their own accountants. You cannot beat a recommendation from someone you trust.

Further Resources

For more information, try the ICAEW pages on choosing an accountant or the ACCA. Both have directories of member accountants. If you’re a professional contractor, try this comparison table of contractor accountants.

Take a look at our directory of limited company accountants.