This Content Was Last Updated on March 3, 2023 by Jessica Garbett
Choosing an accountant can be a bewildering process. Here are our thoughts, which we’ve tried to make as objective as possible:
Some of the questions you need to ask are:
- Fee Structure
- How the Firm works in Practice
- Special thoughts for Personal Service Companies, Freelancers and Contractors
- Special thoughts for the Yoga and Mind/Body Sector
Rightly or wrongly there is no obligation for anyone to have a qualification before setting up as an accountant in the UK.
The major UK accounting qualifications are:
- Chartered Certified Accountants (members of the Chartered Association of Certified Accountants and using the letters ACCA or FCCA after their names)
- Chartered Accountants (members of either the Institute of Chartered Accountants in England and Wales or the Institute of Chartered Accountants in Scotland, and using the letters ACA, FCA or CA after their names)
- Chartered Management Accountants (members of the Chartered Institute of Management Accountants, and using the letters CMA after their names)
- Chartered Pubic Finance Accountants (members of the Chartered Institute of Public Finance Accountants, and using the letters CIPFA after their names)
- Chartered Tax Advisers (members of the Chartered Institute of Taxation, using the letters CTA after their names). This qualification is focused on tax.
These qualifications are generally agreed to be of an equivalent level, although the different bodies focus on differing sectors.
The difference between ACCA/FCCA and ACA/FCA, is the F means Fellow whereas A means Associate – an F will have been a member longer and have more experience.
Whitefield are members of the Chartered Association of Certified Accountants. Our Managing Director and Principal holds FCCA status.
Generally a professional qualification from the list above gives you some extra assurance and avenues if things go wrong.
You may also come across:
- Accounting or Tax Technicians (members of the Association of Accounting Technicians or Association of Tax Technicians respectively, and using the letters AAT or ATT). These are intermediate qualifications sponsored by the accounting and tax bodies referred to above. Very often the staff looking after you in an accountants office on a day to day basis will hold these qualifications.
Outside of the above qualifications you may also come across:
- Other accounting / tax qualifications – there are a plethora of these, often with titles like “Association of” or “Institute of”. These are considered second tier qualifications, and may not be underpinned by robust standards
- Ex HMRC staff – their specialist knowledge can be very useful, but may come at the expense of a broader understanding. Of course, there are various grades of ex HMRC staff from former Senior Inspectors of Taxes to more junior grades
- Unqualified accountants – check what experience they have and how it was gained. They may have more experience than some qualified accountants.
Many accountants without qualification, or with a second tier qualification, provide an extremely good service, maybe better than some qualified accountants who are resting on their laurels. However the lack of a qualification may restrict your options if you need to make a complaint or claim on your accountants Professional Indemnity Insurance.
Understand the experience profile of your prospective accountant:
- How much experience they have, and how obtained
- How much experience their senior staff members have, and how obtained
- Experience with clients in your field – it is probably unrealistic to expect your accountant to have other clients doing exactly the same as you, but they should have a grasp on what your business is about, and have experience with similar types of businesses
- Experience with the issues that you think will concern you most, eg tax advice, business structure, business development
For more details about our staff, visit the About Us section of our web site. Our senior staff have in excess of 100 years small business accountancy experience between them.
Our client base covers a wide variety of sectors. A lot of our clients are Personal Service Companies, the remainder are an assortment of clients covering sectors like retail, hotels, property development, construction and many more. We have a Daughter Business working in the Yoga and Mind/Body sector, our MD being a Yoga Teacher and Yoga Therapist.
You should have a written quote in advance for the work you require.
You need to be clear what is included in this quote, eg is it fully inclusive, or are there extras? For example does the quotation include:personal tax returns, directors payroll, ad hoc meetings and phone calls which are often subject to additional charges.
Is this price fixed, or merely indicative? If indicative, what are the hourly rates?
If it is fully inclusive, you will probably find that major additional items, eg tax enquiries, are charged separately, in which case you need to ask about the rates applicable and the availability of insurance.
Fixed fees are the modern way of pricing accountancy services, and you should be cautious if you are simply quoted hourly rates or given estimates of “About £xxx”.
Ask about payment terms – is a monthly payment available, or is it pay annually? What does the accountant prefer? What do you prefer? What are the payment terms?
We agree a fixed fee for all routine work with our clients, charging non routine items separately – about 95% of our clients pay the fixed fee only, and when non routine items come into play clients are always told in advance. We welcome monthly payment terms, and the majority of our clients pay that way.
This is perhaps the most nebulous area, as each accountancy firm will have a different style, and each client different requirements.
However ask about:
- Who will look after your affairs on a day to day basis? Will you have named contacts?
- Is there an integrated accountancy, tax and advisory function?
- Can you contact staff by e-mail?
- Can you send records in electronically?
- How are meetings arranged?
- What are the average accounts and tax turnaround times?
For a PSC/Contractor the choice of accountants and similar service providers is bewildering. Many jazzy websites, many dubious promises of take home percentages. A few thoughts:
- Services offered range from an almost complete management package for your company (although in principle this conflicts with the Managed Service Company rules) through to a portal for self managing your accounts and tax with an accountant on hand for questions, in many ways a hosted bookkeeping and accounting package with accountants support.
- We are unashamedly old fashioned here – rather than go to either extreme, we start from the premise that our clients are professionals and business people – like us – and we prefer to advise and guide rather than dictate. So in many respects our service is hands off, in a good way – we prefer clients to ask for advice rather than us dictate, but to match that we are committed to both keeping our clients informed about the fiscal regulatory environment and being a “critical friend” when necessary.
- Watch out for companies advertising certain take home percentages – its attractive if an accountant says they can increase your take home by more than a competitor, which by implication means getting the tax bills lower. However exactly the same tax rules apply to everyone – different take home illustrations from accountant to accountant can only mean different modelling or differing base assumptions. Our view is this misleads potential clients, and glosses over the inherent complexities in the tax system. Tax isn’t simple, and the same rules apply to everyone.
- Preferred accounting systems vary amongst accountants from using spreadsheets, using bought in systems (eg Xero, FreeAgent, Sage QuickBooks) or proprietary web portals / off-line systems. You’ll need to be assured the accountants way of working suits you. Its also worth asking about flexibility – must you use their systems – and portability of data if its a proprietary system. We guide our clients toward FreeAgent, with a Spreadsheet option for non VAT registered clients who prefer it, but we are Open Platform so will work with our clients own choice of packages like Xero, Sage, QuickBooks.
Our experience is that the language of business and tax can often be one that business owners in this sector struggle with. Our advice to anyone in this sector is to ensure that your accountant is able to communicate in clear language and ensure that you are understand your tax and business obligations.
Whilst there is no objective need to use a sector specialist accountant, there are certainly some subjective benefits in working with an accountant who understands the sectors nuances and business practices.
We have a Daughter Business Working in the Yoga and Therapy/Movement sector, our MD being a Yoga Teacher and Yoga Therapist.