Are you planning to hire an accountant? Have you spoken to a few but still feel unsure about what they are telling you or if you’ve asked the right questions? Then read on!
The accountant you choose will get to know you, your business and possibly your personal finances since these can all intermingle when you are self-employed and filling in a tax return. That means they need to be totally trustworthy with all your confidential info and you’ll want to be 100% confident in the advice they are giving you. To help, here are 5 essential questions you must ask before you hire an accountant.
Updated 16 September 2021
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1. How Do You Charge?
Different accountants charge for their time in different ways. And how you will get the best value for money from your chosen accountant depends on your needs. Here are typical pricing structures accountants use:
Price Per Job
If you are looking to hire an accountant to file your personal tax return once a year and have fairly few requirements outside of this then finding an accountant that can quote for carrying out this single task may be suitable. It also makes it really easy to obtain various quotes from different accountants and compare them side by side.
Fixed Monthly Charge
If you run a business and have an ongoing requirement for bookkeeping, management accounts and year-end accounts, then accountants may choose to quote you a fixed monthly charge. Fixed monthly charges are a great way for you to spread your accounting costs, manage your cash flow and avoid a large debt from mounting up. Make you have a clear list of the services you need in advance of any conversation. And you make sure which services are included and excluded from the fixed charge before you sign up.
Depending on the work that needs to be done, some accountants may quote an hourly rate and make an estimate of the time required. This may be fine if you are searching for a freelance accountant to help you manage your business finances in an office where you can manage them. However, if you are not able to see how their time is spent then paying by the hour could mean large unexpected bills.
2. How Do We Stay in Touch?
When you hire an accountant you need to be able to communicate with them in a timely way to avoid a last-minute rush or, worst of all, missing deadlines and facing penalties. I’ve seen accountants who leave it until the last minute to ask their clients for information and it puts the client under pressure. But it also puts your accountant under pressure to complete your returns and they put themselves at risk of missing out on tax deductions and allowances or makes mistakes. Before you hire an accountant ask them:
- Whether the price or time they quote includes time over the phone and meetings;
- Reminders of deadlines and tax bills throughout the year;
- Are they available over the phone, skype or Zoom;
- Will you have access to your accounting data via a cloud based accounting software;
- How to securely send them your information and paperwork.
It is also worth asking whether your potential accountant makes themselves available for one off questions on an ongoing basis. Obviously, for extended complicated questions, charges may arise but check whether they generally contactable by phone or email to support you on an ongoing basis.
3. What Qualifications Do You Have?
Chartered, Certified, CTA, AAT is just some of the accounting qualifications out there and each one means an accountant is trained with different specialisms and governed by bodies meaning they are bound by confidentiality rules. Before you talk to any accountants think about what you really need. If you are not sure call some potential accountants to chat about your situation to help you draw out what you are looking for. That way before you hire an accountant you know they have the right qualifications and experience that matches your needs.
4. Do You Work Alone?
We all get sick and go on holiday. Your accountant is no different but while they are on holiday what additional support is available if you have a question or need ad hoc help? An accountant who works from home is likely to be cheaper. But if you run a business that needs ongoing support you could find yourself unable to reach out to your chosen accountant when needed.
If you do hire an accountant who works alone then keep in mind you are only getting one persons experience. Accounting and tax is a very broad topic, with complicated rules and one person can only know so much. If you do feel you have complicated tax affairs then ask if your accountant works alongside tax specialists. That would broaden the expertise being offered.
5. What Sectors Do You Specialise In?
Tax and accounting requirements differ across different sectors. For example, property tax for landlords is very different to self-employed tax, as are the allowances and reliefs applicable to each. Be sure to ask your potential accountant which areas they specialise in that way you’ll know they have the best possible knowledge and experience for your needs.
Your accountants’ fee can often be one of the most expensive bills that you have to pay for so it is essential that you feel you have received the right service and trusted advice. Before you reach out to potential accountants take some time to write down exactly what services you feel you need and the type of person you would like to work with. That way you can question them in-depth and with confidence.
- Should I Get an Accountant to Do My Tax Return?
- How to Fill In Your Tax Return
- What Happens if You Miss the Self Assessment Deadline?
- UK Income Tax Allowances and Reliefs
Taxes are changing! From April 2024 sole traders will need to report their earnings and pay tax on a quarterly basis. This is known as Making Tax Digital, which you can read more about in this guide to help you get prepared.