Hiring an accountant can feel like a daunting task especially if you have never hired once before or have had a bad experience. Your accountant will get to know you, your business and personal finances since all these aspects often intertwine so not only do they need to be trustworthy with all this confidential information, you also need to have 100% confidence in the advice they give to you. So here are 5 essential questions you must ask before you hire an accountant:
1. How Do You Charge?
Different accountants charge for their time in different ways. But understanding how to get the best value for money may depend on your needs. Here are some typical ways accountants charge and examples of the situation each one may suit:
Price Per Job
If you are trying to hire an accountant to just file your personal tax return once a year, for example, and have fairly little requirements outside of this then searching for an accountant that can quote for carrying out this single task once a year 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 often accountants may choose to quote you a fixed monthly charge. This is a great way to spread the cost, manage your cash flow and avoid large accounting fees mounting up. Just make sure your accountant makes it clear what services are included and excluded from this fixed charge before you sign up.
Depending on the work that needs to be done, some accountants may quote according to 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?
In order for your accountant to be effective and obtain the right information from you so you pay the right amount of tax, you will both need to communicate with one another. Ask your accountant whether the price or time they quote includes time over the phone or a meeting to talk things through. Also ask how they normally obtain the information they require from you – will they email you with a list of things they need before they get started? Should you post information or will they collect it from you?
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 are they generally contactable by phone or email to support you on an ongoing basis.
3. What Qualifications Do You Have?
Chartered, Certified, CTA, AAT are just some of the accounting qualifications out there and each one means an accountant is trained with different specialisms.
Before you start to liaise with potential accountants work out what you really need from your accountant. Is it business tax, personal tax or help with funding your startup? Then ask what qualifications and specialist experience they have to match your needs.
4. Do You Work Alone?
We all get sick and go on holiday. Your accountant is no different but while he is on holiday what additional support is there if you suddenly have a question or need ad hoc help. Whilst an accountant who works alone from home is likely to provide a cheaper price because they have reduced overheads, 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 choose 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 which 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 is very different to self employment tax as are the allowances and reliefs applicable to each to remain tax efficient. Be sure to ask your potential accountants which areas they specialise in so you know they have the best possible knowledge and experience for your needs.
Your accountants fee can often be one of the most expensive bill that you have to pay for so it is essential that you feel you have received the right service and trusted advice. Before you begin to reach out to potential accountants take some time to write down exactly what services you feel you need so you can question them in depth and with confidence.