How to Choose an Accountant for Your Business

Knowing how to choose an accountant for your business matters more than most owners realise. The right one saves you time and tax and spots problems early. The wrong one files your returns, sends a bill and says little in between. This guide sets out what to check, what to ask and what to avoid.

Start with what you need

There are two broad kinds of service, and many firms are better at one than the other.

Compliance. Preparing and filing annual accounts, Corporation Tax returns, VAT returns, payroll and personal tax returns, and keeping you on the right side of deadlines.
Advisory. Looking ahead: planning how you take money out, forecasting cash, structuring the business, preparing for growth, and planning a sale or succession.

If your business is simple and stable, a compliance service may be all you need. If you are growing, bringing in family or partners, or thinking about selling, you will want advice too, and it is usually better to get it from the same people who see your figures all year.

Qualifications and regulation

In the UK, anyone can call themselves an accountant. Some titles are protected, such as chartered accountant, but “accountant” on its own is not. So check:

Professional body. Look for membership of a recognised body such as ICAEW, ICAS, ACCA, AAT or CIMA, and ask which one. The body’s website lets you confirm that someone is a member. [DOUG TO CONFIRM: KSBA’s professional body memberships and any regulatory status to mention]
Supervision. Accountancy firms must be supervised for anti-money-laundering purposes, either by a professional body or by HMRC. Ask who supervises the firm.
Professional indemnity insurance. A reputable firm carries it and will say so.
Software and training. A firm that keeps up with changes such as Making Tax Digital is more likely to keep you compliant.

A qualified accountant is not automatically a good one, but a firm that is open about its qualifications and supervision is a better bet than one that is vague.

Fixed fees or hourly rates

Accountants charge in two main ways.

Fixed fee. You agree the price for a defined scope of work, often paid monthly. You know your costs, and the firm has a reason to work efficiently.
Hourly rates. You pay for the time spent. That can suit one-off projects, but it makes costs hard to predict and can make you reluctant to call.

Ask what the fee covers. Does it include year-end accounts, tax returns, payroll, VAT, and phone and email questions? Is advice included or charged separately? A clear engagement letter should answer all of these. A fee that looks low but excludes half of what you need is not low.

Comparing quotes fairly

If you ask three firms for a quote, you will often get three different scopes. Before comparing prices, write down what you need and ask each firm to quote against the same list: year-end accounts, tax returns, VAT, payroll, bookkeeping help, and how much time with a partner is included. Then compare what is in and what is out. The cheapest quote is often the one that leaves the most out, and an extra charge for each phone call or each question adds up quickly.

Ask how long the firm has worked with businesses like yours and what happens if your needs change. A firm that grows with you is worth more than one that is cheapest in year one.

Software and how you will work together

Most firms now work with cloud accounting software such as Xero, QuickBooks or Sage. Ask which they support, whether they will help you set it up, and how you will share documents and ask questions. If Making Tax Digital applies to you, you need software that supports it.

Think about how you want to deal with your accountant. Some owners want a named person they can call. Others prefer to work online and rarely speak. Neither is wrong, but make sure the firm’s way of working matches yours.

Local or online

A local firm can meet you face to face, understands local business conditions and is easier to reach if something goes wrong. Online firms can be cheaper and efficient for straightforward needs. For owner-managed businesses that need regular advice, many owners prefer a firm they can sit down with, even if most contact is by phone or video.

Questions to ask

Which professional body are you a member of, and who supervises the firm?
Who will I deal with day to day, and who will I speak to if I need a senior opinion?
What exactly does the fee include, and what would cost extra?
How do you charge for advice, and can I have a fixed fee in writing?
Which accounting software do you support, and will you help me set it up?
How often will we speak outside of deadlines?
How do you handle a tax enquiry from HMRC, and is that covered by the fee?
Can you give me examples of businesses like mine that you work with?

Red flags

Vague about qualifications, supervision or insurance. A good firm answers these questions easily.
No written terms. If there is no engagement letter, nothing says who is responsible for what.
Promises of guaranteed refunds or very large tax savings. Responsible advisors do not promise results they cannot control.
Recommending aggressive tax schemes. If it sounds too good to be true, it probably is, and HMRC may challenge it later.
Slow responses before you sign. If they are slow to reply while they are trying to win your business, expect worse afterwards.
You only hear from them when a bill or a deadline is due. That is a compliance service, even if it is sold as more.

A good first meeting

A good first meeting is a conversation about you, not a sales presentation. The accountant should ask about your goals, your concerns and how the business is run, explain what they would do and what it would cost in plain terms, and be willing to say what they would not do. You should leave knowing the next step and the price.

Why owners choose KSBA

King Street Business Advisors is partner-led, based at 82 King Street in Manchester, and has advised owner-managed and family businesses since 1995. You deal with the partners, Doug Murphy and Stephen Thompson, rather than a rotating team. We agree a fixed fee in writing before any work starts, and we use cloud accounting where it suits the business. Because we are part of a firm that also provides company secretarial and agreements support, we can point you to the right specialist when you need one. [DOUG TO CONFIRM: any additional credentials, memberships or software partnerships you want to mention]

We are not the right firm for everyone. If you want the cheapest possible compliance service and no advice, there are cheaper options. If you want an accountant who knows your business and tells you what to do next, we would like to talk.

How KSBA can help

If you are choosing an accountant, or thinking of changing, the first conversation costs nothing and commits you to nothing. We will tell you honestly whether we are a good fit, and if you decide to move, we handle the handover from your old accountant.

See our page on business advisory in Manchester or call 0161 835 2323.

Talk to us about business advisory

Related guides

This guide is general information, not advice for your situation. Tax rules change and the right answer depends on your circumstances, so speak to an advisor before you act.