Having a good accountant is important for your small business. It could save you a lot of money, time, and effort. Having no accountant or a bad one could result in paying higher taxes than you ought to. An accountant will help you with the end of year returns, filing pay as you earn (PAYE), value-added tax (VAT), business tax, and personal tax returns.
Engagement with your accountant can be on a pay as you go basis or monthly depending on your need. If you are able to file your monthly returns with no help from them then pay as you go is your best option. This is possible if you have good accounting software that your staff is familiar with.
However, if this is not possible and you have a significant amount of bookkeeping to be done throughout the month then you may want to have one come in monthly or even employ them full time.
Depending on the industry, in the beginning, it may not be necessary to employ an accountant – a bookkeeper could suffice but as the business grows the need for complex accounting know-how is required, and having one on board may be a good option. You can determine when to bring an accountant on board when more of the things that need to be done are not being covered by your part-time accountant, or in the letter of engagement.
An internal accountant – one you employ will tend to cover routine procedures you handle in your business and they need not be very highly qualified. The external accountant should cover the most complex issue and help you with problem-solving and be a tax expert, especially in your industry. When getting an Accountant, consider the following factors:
- Expertise in your sector: As with any service provider having one who is an expert in your sector is to your advantage is they are familiar with the subtle nuances of the sector and you do not need to keep explaining the different processes.
- Advisory services: Can they offer business advisory services in your industry? This is dependent on the experience the accountant has. If they are limited in experience it will be difficult for them to advise you effectively beyond what is standard procedure in their profession.
- Meets your needs: for simple basic accounting, a bookkeeper could suffice. However, if there are sector-specific tax requirements and returns to be done, you may need to have a tax expert in your industry.
- Location: it is preferable that your accountant has offices in your town as this improves accessibility.
- Qualified to handle the work at hand. If it involves advanced accounting skills you will need to get a better-qualified person than if the work is basic bookkeeping.
- Representation: Whether they will represent you when you are audited.
- Memberships: Are a member of the local accounting profession association.
- Personality: An accountant is like your business partner. If you do not like them it will be difficult to work together.
- Acceptable to other partners: If you will be seeking to finance or work with other partners ensure they are acceptable to those partners.
- Professional indemnity insurance: this will ensure you are protected and can sue if they make a mistake with your tax returns they are responsible. This will not apply if the accountant is employed.
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