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As you will see, there is a lot to think about when it comes to getting the right person to deal with your accounts, particularly in that first, highly vulnerable twelve months. As Paul says:
“Starting your first business is an exciting milestone, but, as Smart Business Recovery point out in their support pages, it also brings a wide range of responsibilities. One of the most important of these, and one of the areas where we often see issues, is managing your finances correctly. So, clearly, one of the most important early decisions you’ll make is choosing an accountant. The right professional can offer more than just compliance support. They can be a trusted advisor, helping guide your business through its formative year.”
He really hits the nail on the head there. So, over to Paul for more good advice.
Most new business owners will quite rightly focus on costs. I agree, keeping costs under control is vital both in the first year and well beyond it. However, affordability is a different thing from cost and getting value isn’t always about the amount you pay.
Let’s start by getting rid of a myth. It is wrong to assume that all accountants offer the same service. It’s easy to be drawn in by low-cost offers when you’re starting out, only to find that the service provided is either not what you need or later needs ‘topping up’ with other costly services. Similarly, expensive services don’t always equate to the right service for you. They may be comprehensive, but if you don’t need what they offer, then the value is not there.
Pauls Key Point: Check the service level being offered by the accountant and choose based on value for your money. That may not necessarily be the cheapest or flashiest looking offer.
However, there is a second part to this test.
As a new business owner, you’ll likely have a lot of questions and need frequent advice. Your accountant should be someone you feel comfortable contacting, whether that’s for tax guidance, cash flow queries, or help interpreting financial reports. So, as well as the value test, a good accountant will also be one who can communicate effectively, do so on your level, and be able to give you information in plain English.
What I am saying here, in a nutshell, is that your new accountant should also be approachable and available. No accountant is offering value if you can’t get to see them or access the advice you need. I am not saying they should be there 24/7 for you; that would be unreasonable. However, you should be able to rely on them for the advice and information you need and get that guidance in a reasonable time scale.
Paul’s key point: Almost every accountancy firm will offer a free, no-obligation consultation. Use this opportunity to meet potential accountants in person. This allows you to assess how approachable they are, how clearly they communicate, if the service they offer meets your needs, and whether you feel they understand your business.
If you operate in a specific niche, you may come across accountancy firms that promote themselves as sector specialists. While this can be advantageous, don’t take it at face value. Just because a firm has a polished website, a well-presented marketing pack, or advertises itself as a leader in your industry, it doesn’t necessarily mean they are the best fit for your unique business. The bottom line is that for many businesses, the advice they need is not necessarily rooted in a specialist area. Even where it is, there is still a balance between specialist knowledge and being a good accountant for you.
Take advantage of their free consultation and ask detailed questions.
Use these interactions to gauge whether their experience genuinely aligns with your needs.
Paul’s key point: Specialisms are great when they are really needed. Often, what is more important is a solid understanding of your goals, how your business runs and, of course, how to make the best decisions about your accounts.
An accountant should also be there to protect you from compliance mistakes. New business owners are often unaware of the various financial submissions and deadlines they’re responsible for. From annual accounts and corporation tax returns to PAYE (Pay As You Earn) submissions and VAT returns (if registered), there’s a lot to manage.
A good accountant will explain:
This clarity is essential. If a prospective accountant can’t explain your responsibilities in simple terms, or doesn’t have time to do so, then they may not be the right fit for a new business owner.
Paul’s key point: Are you happy that your new accountant will make sure you know what needs to be done and when… and not be afraid to chase you if needs be?
Before meeting with an accountant, it’s important to have a clear understanding of your own business. I have mentioned several times now that your accountant needs to be familiar with your business and your goals, which means that happening is a two way street. They can’t help you in the right way unless you can explain your business to them.
This includes, but isn’t limited to:
These factors will help determine big decisions, like whether you should trade as a sole trader or a limited company, and whether you should register for VAT (Value Added Tax). They will also give the accountant the right framework in which to offer advice.
Paul’s Key Point: Tailored advice should always be based on the specifics of your situation and your business plan. If an accountant is offering a one size fits all solution, they may not fully understand your business.
Most accountancy practices will encourage you to use accounting software. Xero is a common one, but there are others. These tools allow for real-time tracking of your income and expenses and help streamline submissions to HMRC (His Majesty’s Revenue & Customs).
When discussing software, ask:
Feeling comfortable with the software you use means you’re more likely to keep your records up to date, which in turn helps your accountant give you timely and accurate advice.
Paul’s Key Point: The software should work for you, not the other way around. When you are choosing an accountant, make sure their choice of software and the support for it are an important part of your decision.
In the early days of your business, you may need more than just accounting support. Legal advice, funding options, insurance, HR services, specialist business support and so on, may all become relevant sooner than you expect.
Accountants who are well-connected can introduce you to other trusted professionals in their network. So, ask a few questions. Do they attend local area network groups, for example? Ask whether they work closely with other advisers, and if they’re happy to refer you when needed? A strong network can be an asset as your business grows.
Paul’s Key Point: Networks grow businesses. It’s a cliché but true that people buy from people, so if your accountant never leaves their office, they may struggle to fully support you in the wider business sense.
Choosing the right accountant in your first year is about more than ticking boxes for compliance. It’s about building a relationship with someone who understands your goals, communicates clearly, and supports you proactively. Don’t be afraid to shop around, ask questions, and take full advantage of the free consultations offered. You’re not just hiring a number-cruncher, you’re choosing a business partner. If you get it right at the start, you will get someone who will be there to help, support and of course, do the accounts, as your business grows. In fact, having the right accountant will be a vital factor in that growth.
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