Choosing an accountant to help you manage your business’ financial affairs is one of the most important decisions you’ll make.
The person you eventually go for will not only be privy to a large pool of information about your business’ performance and future viability, but he or she will also be the one you trust when it comes to arranging your tax affairs and submitting important documents to the government on time and with full accuracy.
That’s why it’s a good idea to always go for someone you trust and who is appropriately qualified for the job. In this article, we’ll take a look at some of the important qualifications you should look out for when choosing an accountant for your new limited company.
Accountancy qualifications to look out for
In the United Kingdom and Ireland, qualified accountants tend to be accredited by a professional body or organisation.
The organisation provides educational materials and exams which the prospective accountant sits, and once they’ve passed they receive a certificate and a qualification to demonstrate their capabilities.
As a result, if you’re searching for a trusted accountant then it’s a good idea to start with professional memberships.
The most well-known of these is the Institute of Chartered Accountants in England and Wales, or the ICAEW for short.
This organisation has over 147,000 members across the world, and is one of the most respected professional groups. It offers a well-known qualification called the ACA, which is short for the Association of Chartered Accountants, and covers a range of important competencies for accountants including decision making skills, problem solving capabilities and team work skills.
New businesses may find that they need someone who can assist them not only with bookkeeping and filing tax returns, but also with strategic decisions such as commercial plans and prudent spending.
An accountant qualified with the Chartered Institute of Management Accountants (or CIMA for short) will, as the name suggests, be a specialist at handling management accounts, as well as financial accounting and will provide a variety of business expertise.
Another organisation is the ACCA (short for the Association of Certified Chartered Accountants). Accountants who hold this qualification are expected to have “the cross-sector accounting and finance knowledge, skills and professional and ethical values needed in all organisations and every industry.”
The ACCA has almost 200,000 members and 486,000 students globally.
There are other professional bodies for accountants, too, such as ICAS, and Chartered Accountants Ireland. You can find out more about the UK’s major accountancy bodies here.
Can a firm be qualified, but their individual accountants not be?
At some accountancy firms, some individuals who work there may not be qualified even though a manager is. This is fairly normal in specialist firms who cater for the needs of small limited companies (such as contractors, freelancers and consultants).
This is usually fine, as some tasks which are a part of the accountancy process are relatively straightforward and can be carried out by a junior staff member.
One thing you must make sure of if you take this option, however, is that someone at the firm is qualified, and that this person signs off on major pieces of work related to your accounts. For example, your company’s annual accounts would be signed off by a qualified accountant.
Must accountants be qualified?
It’s not a legal requirement for an accountant to be qualified in any way. When setting up a new limited company, you don’t have to make sure your new accountant is a member of any professional body and it’s not your responsibility to make sure that the person you go for is accredited at all.
By the same token, anyone can in theory set themselves up as an accountant and they don’t have to pass exams or gain certification in order to claim the name.
However, it’s important to think carefully before opting for an accountant who doesn’t have accreditation.
While it may be that an unqualified accountant will charge less and save you money in the short term, you must weigh that benefit against the risk that they will cost you money down the line by not doing the job well enough.
Accountancy requires a number of complex technical skills – and if the unqualified accountant you chose did cause havoc for you, you may have to pay again to get a professional to put it right.