10 questions to ask an accountant before you sign up

If you’re searching for the best accountant to look after your company’s tax affairs, the choice can be bewildering – especially if you’re starting in business for the first time.

Not only do you have to find a firm you feel comfortable with, you also have to learn an array of tax and accounting terms – and work out your own responsibilities, as a director.

We have dealt with limited company accountants at LCH for many years. We work with a number of accountants when creating new guides and calculators. We’ve also hired (and fired) accountants before.

Do you have to hire an accountant for a limited company?

This is a question we’ve seen asked so many times. The short answer is “no, you don’t”. You can decide to look after your company’s tax affairs yourself, assuming you have the skillset, time and patience to do so.

However, for the vast majority, hiring an accountant is the prudent thing to do. There are a lot of things to keep on top of – even for a small entity. We strongly recommend hiring an accountant as soon as possible when setting up a new company, as they will also be able to help with a variety of start-up duties.

Read more in our guide – do you need to hire an accountant for your new company?

10 questions to ask an accountant before signing up

To help you in your search, we’ve compiled 10 questions you should ask prospective accountants, to find out if they’re the right fit for your limited company.

1. When was the firm established?

How long has the firm been in business? Has it got a good reputation? Look for a firm with a strong track record of working with small companies.

2. Will I have access to a dedicated accountant?

There are few things more frustrating than not having a single point of contact at an accountancy firm. It is crucial to have a specific person to contact – even if this is an accountant who has a support team dealing with day-to-day enquiries.

3. What type of accounting systems to you use?

Accountants almost universally use one or more of the leading accounting software packages to maintain your books. These include FreeAgent, Xero and Clearbooks. Online software has been a gamechanger for accountants and small business people. It has never been easier to keep on top of your tax and interact with your accountant.

4. How do you communicate with your clients?

Aside from keeping accurate accounts – which should go without saying, good communication is a strong second in a list of ‘must haves’. Is there a client portal to exchange information, and are there any response guidelines or guarantees – such as “we aim to reply to all emails within 48 hours”?

5. Are you aware of industry-specific legislation?

Small companies, in particular, have borne the brunt of successive waves of new tax rules over the past decade. These include the 2016 dividend tax rate hike, the IR35 legislation, and changes to the way you have to keep records (Making Tax Digital). Make sure your accountant is very up-to-date with any legislative changes relevant to your industry too.

6. How do you calculate your fees?

You will typically have an annual fee to cover all of the typical accountant duties – paid monthly, quarterly or annually. Make sure you find out if there are any additional charges, what’s included and what’s not.

7. Can you provide references?

Any decent accountant will be more than happy to provide a reference or two, so you can talk to existing clients. Even if you don’t take up the offer, you will want an accountant to show that they are willing to provide them.

8. Which accountancy bodies are you a member of?

Most accountancy firms will be members of one of the leading accountancy bodies in the UK – ACA, ACCA, CIMA or ICAS (Scotland). This should provide you with confidence that the firm is professionally regulated. Find out more in our guide – is your accountant qualifed?

9. How will you help my business save tax?

A good accountant will help save you money – by making sure you make the most of existing allowances, and being knowledgable of tax breaks or any upcoming changes to tax law.

10. Why should we hire you as our accountant?

How keen is your potential accountant to help your business? How proactive have they been in your initial discussions? Overall, you should get a good (or bad) feel based on your fact finding, and intuition.

Further resources