In the beginning, many entrepreneurs who establish their own small business enterprise or startup decide to juggle many responsibilities on their own. This often includes the role of the accountant, who is responsible for bookkeeping, taking care of the paperwork for taxes, and preparing financial statements. As time progresses and small businesses grow in size and complexity, however, it often becomes necessary to hire a specialist to take care of all its financial aspects.
Choosing an accountant is one of the most important decisions that you can make as a small business owner or startup CEO. A good accountant does simply take care of the financial paperwork involved in your business operations.
He or she will become highly attuned to all aspects of your business and will ideally become a crucial business partner that will help it grow, thrive, and navigate the financial challenges it will face. A good accountant will save you time and money by anticipating and solving problems. This can include legal ways of reducing your tax burden, finding grants, funding opportunities, and tax relief schemes that your business is eligible for, and providing valuable advice for your long-term business planning.
The task of screening through potential accountants to hire (and trust!) can seem like a difficult prospect. Here are some factors that you need to consider during the process to make the best and most informed choice – which will provide crucial benefits to your business over time:
- An Inside Accountant vs. an Outside Accountant
In the beginning, most small businesses and start-ups lack the volume of financial transactions that would merit the hiring of a full-time in-house accountant. At this early stage, it often makes more business sense to hire an accounting firm or an external accountant to conduct regular financial reviews and make sure the business’ ledgers are updated before tax season.
As the business starts earning more revenue and engaging in more complicated business transactions (e.g. the accumulation of assets, debts, and liabilities), hiring a full-time or part-time accountant can result in valuable cost savings. The in-house accountant can then be relied on to take care of recording daily transactions, preparing financial statements, dealing with salary and debt payments, and taking care of cost accounting and fixed asset accounting.
The availability of cloud accounting software has made remote accounting accessible to start-ups and small businesses across the globe. This allows your accountant to access your businesses’ financial data in real time, regardless of where he or she is. You can communicate efficiently, conveniently, and cheaply through the use of emails, video chats, text messaging, and cloud-based work collaboration platforms.
However, there are still reasons to look for an accountant who works nearby your business location. This allows for more opportunities for face-to-face contact and more flexibility in terms of timing (time zone differences often allow for limited windows of interaction when it comes to cloud accounting). An accountant working nearby is also more likely to be attuned to local specificities and the particular needs of your industry. If the accountants working in your immediate vicinity (e.g. central London) are relatively expensive, you can always look for accountants in further districts (e.g. accountants in Tooting or accountants in Eltham).
- Qualifications and expertise
When screening potential candidates, you should pay close attention to their qualifications and whether they are regulated by a professional accounting body. There are professional advantages to hiring an accountant who has been certified by the Association of Chartered Certified Accountants (ACCA) or the Institute of Chartered Accountants in England & Wales (ICAEW). For example, an ICAEW member has professional indemnity insurance that will cover any losses your business incurs due to unsound accounting advice.
You should also take note of an applicants’ working experience with businesses that are of a similar size, nature, and scope. This will help ensure that they have a solid understanding of your specific business challenges and dynamics. Conduct background checks and ask for referees to ensure that your candidates are credible.
Most accountants develop a preference and familiarity with only a few types of accounting software. Hiring an accountant who is already adept at using the in-house accounting software your film is utilizing will contribute to greater time savings and error avoidance. This can also help ensure that your sensitive financial information remains secure and confidential.
Accountants can charge you via a variety of methods: hourly, monthly, or as a percentage of your turnover. When negotiating, be sure to consider different fee structures for the present, near future, and distant future. Expertise, experience, and professionalism may seem costly in the short term, but having a great accountant on your team can make all the difference in the long run.