By Gil Dekel.
Finding a good accountant for your business can be a bit tricky. Where should you start?
First, you want to know that there are big accounting firms and there are small ones (with some accountants working from home).
Your search should have a balanced strategy – looking both at online resources, and also speaking to people near you. Do not rely on online search alone. You want to develop your knowledge based on real people’s experiences.
When you find websites of accounting firms, compare them and note down the different services they offer. Also, look in your local library for ads and leaflets of businesses. I went to contact a few businesses and have asked for their advice. Some were very happy to share ideas and suggestions.
After compiling a list of potential accountants I contacted them by email. My emails were very specific and short, describing:
- what I expected to earn the coming year,
- the type (entity) of my business,
- my services/products,
- whether I was looking for investment or not,
- a link to my website,
- the city where I live, and
- a bit about myself.
Do not write long emails. Keep it short.
Learn from each reply you receive. What do they ask you? What do they offer? Did they understand your business from the way you described it to them?
I noted down all the questions that I was asked – and included my answers in all further emails I sent to new accountants.
If you want me to review your email, and provide some suggestions (for free) then contact me (click here), but I cannot promise I will reply to everyone. Alternatively, you can use this template sample email.
sample email (click to expand)
Hello [add name of accounting firm/person],
I am seeking initial advice about starting up a new business from scratch. It will be about selling digital e-books downloads, and consultations (healing) service, mainly online via PoeticMind.co.uk. Also, I plan to develop ‘physical’ Reiki healing and creativity workshops, to which I will take bookings online.
I do not anticipate that I will need much funding (as most of the business will be online). What I ask is for advice on setting up the right business type (entity), and help with tax return.
Can you help with this?
Thank you, [add name, and city]
The larger accounting firms could charge you anything from 400£ to 1200£ or more. It depends on how complex your business is, and on how organised you are. The more organised you are, the less they will charge you. Keep all your receipts, and have a system to note all incomes/expenses.
Be careful. Some accountants will look at your projected figures to try and see how much money they can make from representing you. I do not mean to say they do anything wrong. They can charge anything they want in accordance with the law. But just be aware that some will want to add ‘extra’ service, or extra value, at a cost. They may say that they will put you in touch with other clients they have. So, they act as a small networking service. This can be very useful indeed, but keep in mind that you will probably going to pay more for this.
You already have a few expenses when you set-up a new business, so be thoughtful before you commit to additional costs.
I have met lovely accountants in my search. One big accounting firm agreed to meet me even thought my business was relatively small for them. They were so impressed with my enthusiastic email and my research so far, and they knew that I will not waste their time.
They agreed to see me for half-an-hour, and to answer all questions I had, for free. Most accountants will meet you initially for free, and will answer many of your questions – but not always. Some accountants will charge you for an initial meeting. They will charge you because they spend a lot of time meeting people, some of which just want to get free advice off them without committing to hire the accountant’s services. If you do hire their service, they would usually deduct the initial charge. For example, they may charge you £50 for a meeting, but if you then decide to hire them, then they would take that £50 off the charge of their full service.
Such arrangement makes sense to me; however I preferred accountants that had the time to read through my short email, and have a quick phone chat. If they could appreciate my honesty and agreed to meet at no charge, then I appreciated their honesty in return. At the end of the day, accountants do want to know about new businesses around. It is in their interest to keep an eye on what is going on. From their perspective you can be their next client or a lead to potential future clients. So, meeting accountants has mutual benefit – for them and for you.
At the end of my half-an-hour meeting with the big accounting firm, they offered to do my tax return at half the price they usually charge. This was truly kind of them, but still more expensive than the accountant I chose at the end.
Apart of the cost, there was another reason for choosing a different accountant. While the big firm’s offer was generous I noted that they had bigger clients that earn them larger fees. I could see that they would not have time to answer any further queries that I would have.
So, even if a big firm does agree to represent you, think twice. You do not need someone to only do your tax return at the end of the financial year, but rather someone to help you with any queries you may have on the way.
In The UK, the HM Revenue & Customs operates a help-line for small businesses to call for advice; however I do not think they have the time to give you the full picture of your benefits. If you ask a question, you will get an answer from them – which is good, and I do encourage you to contact them – yet, when you start a business, you may not always know to ask all the right questions… So, you really want an accountant that will have the time for you, to advise and also to guide you in terms of your complete rights.
Also, remember that big firms may be very generous with you the first year, but they may not be able to be so generous the second year. So, if you agree to go with them for your first tax return at their reduced fee, you may find that the following year they will raise their charge to their standard. You may not be able to afford it in the second year round. And you may not want to spend the time looking all over again for new accountant.
Some accountants I met simply did not ‘feel’ right with me. Others were not really interested, while others still were totally interested… I have found one accountant that was so impressed with my business services that he agreed to mentor me for free (not just help with tax return, but to also teach me the rules and processes) – but guess what… he was so busy, that we never got to work together at the end.
After a few meetings, I chose an accountant that works from home. Home-based accountants are usually cheaper, and usually happy to meet with you more than once to answer your questions. My accountant is such a nice person, and flexible with me. He was happy to explain things, and also to share thoughts from his own experience of setting-up a business in the past.
You may choose not to have an accountant at all. You can do all your tax return by yourself. This is possible, and a friend of mine does exactly that. It all depends on how much time you have.
Apart of accounting, there are other matters you need to consider when starting up a new business – but I will cover them in a different article.
© Gil Dekel.
22 March 2016.
Images used with permission. Blue notebook/laptop © Volkan Olmez/Unsplash. Woman on the beach © johnhain/pixabay.