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Choosing an Accountant

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:

 

Qualifications

Rightly or wrongly there is no obligation for anyone to have a qualification before setting up as an accountant in the UK. Many unqualified accountants 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.

The main qualifications you will come across in the UK are:

  • Chartered Certified Accountants (members of the Chartered Association of Certified Accountants and using the letters ACCA or FCCA after their names); or
  • 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).

Members of these associations will be trained to work in a general practice environment, looking after a range of small business issues. Practising members will hold PI cover, comply with ongoing training and professional development requirements and will be subject to their associations complaints and disciplinary procedures.

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.

You may also come across:

  • Chartered Management Accountants (members of the Chartered Institute of Management Accountants, and using the letters CMA after their names); or
  • Chartered Pubic Finance Accountants (members of the Chartered Institute of Public Finance Accountants, and using the letters CIPFA after their names).

These qualifications are of the same level as those referred to above but members will not have been trained specifically to work in practice.

There are then some other qualifications you may come across:

  • Chartered Tax Advisers (members of the Chartered Institute of Taxation, using the letters CTA after their names). This qualification is geared towards tax only, and is therefore narrower than a mainstream accounting qualification which covers tax, accountancy and general business matters.
  • 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:

  • Unqualified Accountants – check what experience they have and how it was gained.  They may have more experience than some qualified accountants
  • Other qualifications – basically those not listed above, which are not recognised as being mainstream accountancy qualifications in the UK, eg Institute of Financial Accountants, Association of International Accountants. Be cautious about the robustness of these qualifications.
  • Firms staffed by overseas qualified accountants – this is particularly prevalent in the accountancy sector servicing Personal Service Companies, where you may find individuals with qualifications from Australia, New Zealand or South Africa to name but a few. If there is supervision by people with a mainstream UK qualification, fine, otherwise treat with caution.
  • Ex HMRC staff – the attractions of hiring a gamekeeper turned poacher are obvious, but alas the breadth of training of ex HMRC staff can be very narrow – they may be fine on a pure tax matter, but experience on wider accountancy and business matters may be limited.

 

Experience

Ask 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 100 years of small business accountancy experience between them – not much phases us!

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.

 

Fee structure

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 does it include personal tax returns (often charged extra), ad hoc meetings and phone calls (again often charged extra) or is it fully inclusive.

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 investigations, 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 of a firm who simply quote hourly rates with a “About £xxx” when you press them.

Ask about payment terms – is a monthly payment available, or is it pay annually? What does the accountant prefer, what do you prefer?

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 about 75% of our clients pay that way.


How the firm works in practice

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?
  • Is there access to specialists, eg financial advisor, corporate finance?
  • Can you contact staff by e-mail?
  • Can you send records in electronically?
  • How are meetings arranged?
  • What are the average accounts turnaround times?

 

Special thoughts for PSC/Contractor clients

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 some ways our service is hands off – 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 it comes to bookkeeping, accounts and returns.
  • 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 setting 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.
  • Different accountants take a differing stand on how forceful they should be with clients regarding IR35 compliance, ranging from almost ignoring it though to withdrawing if the client doesn’t take their advice – you will need to be assured your chosen accountant meets your own requirements in this regard.
  • 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 will work with our clients own choice of packages like Xero, Sage, QuickBooks.