What You Need to Consider Before Contacting an Accountant
Even the smallest business can benefit from the help of an accountant. Contrary to popular belief, the best accountants don’t just crunch the numbers and prepare the end-of-year accounts, they can also be invaluable business advisors.
Unfortunately, many business owners are daunted by those they regard as the ‘numbers people’. They see the company accountant as a necessary evil. After all, someone needs to get things ready for the tax man. But it doesn’t have to be this way.
A carefully selected accountant can boost your business performance significantly. Here are some things to consider before you seek out an accountant. With some basic preparation, you can be sure that you’ll get the most for your money and actually enjoy working with the ‘numbers person’.
Understand Your Business Objectives
Before you contact an accountant, be very clear on what you are trying to achieve both personally and with your business. Your accountant needs to know your goals so that they can help you reach them. Aspiring to become a self-sustaining community cafe invites very different advice than if you were trying to become a cat-themed Starbucks rival.
With this information, your accountant can help you select or modify your business structure. For example, if you have no desire for rapid expansion then maybe it’s best to remain a sole trader. The cat-themed Starbucks model, however, might be better run as a limited company (which has limited liability).
Also, consider updating your business plan before contracting an accountant. They can then take a look at the plan and smooth out any obvious financial bottlenecks or unrealistic growth paths. Their comfort with projections means that they can help you set realistic and attainable business objectives that will meet your personal goals.
Preparing basic information about your business means that an accountant can quickly grasp the fundamentals of what you’re trying to achieve and explore ways to help you get there.
Know Your Income and Expenses
An accountant will want to know: how you make money and where you spend it. The building block of accounting is your business data, so bring this information along if you can.
An accountant will tell you: always know your costs! With this information, your accountant can help you be tax efficient and pay no more than necessary to HMRC. Understanding where your expenses are incurred will help them find deductions that could save your business a substantial sum.
On the revenue side, accountants can help you with growth forecasts. So before you begin the process of selecting an accountant, update your revenue estimates. With these numbers, your accountant will have a better sense of the areas where you are perhaps over-optimistic and those that might have even greater growth potential.
Presenting your numbers to an accountant will allow them to spot growth opportunities you might have missed. You don’t need an accountant to tell you that increased revenue is a good thing.
Discover Your Accountant’s Experience
Before you contract an accountant, be sure that you’re actually dealing with the right person. Is the accountant experienced in the specific sector that you operate in? You should find one who is.
With direct industry experience, accountants can spot threats and opportunities that you might not have considered. You can learn from the lessons of their previous clients and gain relevant business advice that might give you an edge over your competitors.
This is possible only if your accountant knows about your industry. You’ll pay more for this experience, but it might well be worth the additional cost to avoid any painful, expensive lessons.
Aspire to a Relaxed Working Relationship
The personal side of ‘professional’ services is extremely important. Put simply, you need to like your accountant. Don’t be afraid to meet with several in order to make sure there’s a good fit between you both.
In your initial meetings did they give you time to explain your business and ask them questions? Were they responsive? Given these early interactions, would you be happy to pick up the phone or schedule a face-to-face meeting? It’s not ideal if you only see your accountant once a year to submit your tax declaration.
You need to have a good working relationship so you’re comfortable sitting down with your accountant and discussing in detail what the numbers actually mean. It’s not helpful if you just get sent an updated spreadsheet every few months. If you don’t understand your accountant’s advice it won’t help you to push your business forward.
Make a Careful Decision - Your Business is at Stake
A cheap accountant is a false economy.
Beyond the legal necessities of preparing and submitting your accounts to HMRC and Companies House, a carefully selected accountant can help you optimise your business’s income and expenses. If they have relevant industry experience they can also make introductions to professionals who can boost your operations.
However, when making your selection don’t be afraid to ask your accountant to justify why you should choose them. Your relationship with your accountant is an important business decision and you need to be satisfied with your choice.
Deciding on an accountant can be daunting but with these considerations in mind, you should find it much easier. Like most business relationships, the key is trust and experience. Do you trust your accountant and do they have relevant experience? If you can answer yes to both, then you’ll be in good hands and your business will benefit.