How to choose a limited company accountant

limited company accountant

A good accountant can not only save your company money, but will also provide reassurance that your financial affairs are being looked after, tax deadlines are being met, and potential problems are spotted in advance. So, if you’re starting up a new business, what should you look out for when choosing a limited company accountant?

Costs

Although cost should not be the most important factor to consider, inevitably no company owner wants to pay more than necessary to secure a professional service. There are several ways accountants charge their clients:

  • Annual fee – to cover all fundamental accounting tasks, including compiling your Annual Accounts, processing your payroll, VAT reconciliation, dealing with official paperwork, etc.
  • Monthly fee – most contractor accountants charge for a full accounting service on this basis, in a very competitive market.
  • Time basis – you may prefer to pay your accountant for the time they spend on your account. Additional services provided on top of annual/monthly fees will also usually be chargeable.

Make sure you compare like with like when choosing an accountant. This is easier with contractor-type packages, but for general accountancy services, ask two or three firms to provide a quote.

Firm Profile

Do you want to hire a small, local firm, or would you prefer a larger, perhaps less personal service? How long has the accountant been established, and what other services do they provide?

Specialists?

Do they specialise in particular types of client, such as contractors, engineers, or dentists? For certain professions, it makes a lot of sense to hire a specialist, as they will have knowledge of specific tax legislation or regulations which may affect your sector. If you provide personal services (i.e. as an IT contractor, consultant, interim, etc.), the biggest single threat to your prosperity is in the form of the Intermediaries Legislation (IR35), so you should definitely only hire a firm with experience of dealing with this specific tax rule.

Modern or ‘Old School’

What type of service can your accountant provide? Most small companies value the time-saving benefits of cutting edge technology, rather than putting up with frustrating ‘old school’ methods of communication.

There are now several excellent online accounting systems, such as Xero and FreeAgent, which sit between client and accountant – massively simplifying the accounting process, and keeping both sides up-to-date with invoicing, tax deadlines and payments. You can even reconcile your bank statements with your online accounting platform, and submit tax returns to HMRC.

Unless your prospective accountant has a robust bespoke online system available, they really should be familiar with one of these third party tools. You life will be massively simplified as a result.

Qualifications

Is your accountant qualified with a professional body, such as the ICAEW or ACCA? Although day-to-day accounting tasks can be completed by non-qualified staff (this is not unusual), you should expect tax planning advice to be provided by a qualified person.

Recommendations

Several of the leading small business accountancy firms we work with at LCH take on over 50% of their new clients via word-of-mouth recommendations. If you have any trusted friends and colleagues who have had a good experience with their accountants, their views could provide invaluable. Unfortunately, from our experience, it is hard to use ratings or popularity indicators from the web to determine how good a firm is – as such measurements are so easy to manipulate. For this reason, recommendations from real people are essential.

Facebook
Twitter
LinkedIn

Tax-efficient protection for limited company owners

Relevant Life Cover - Save up to 50% on life insurance
Premiums are paid by your limited company, resulting in a large tax saving. Read our guide.

Private Medical Insurance - Essential health cover
Avoid NHS queues. Private treatment at a time that suits you and your family. Find out more.