A new business will require the services of an accountant to help deal with its financial obligations, not least those involving tax and HM Revenue & Customs. The Business Lounge gives some tips on how to choose an accountant.

1. Anyone can call themselves an accountant (if they are that way inclined). However, UK accountants who have passed professional qualifications in order to work in practice will be members of accountancy institutes, the main ones being listed below. The institutes’ websites often have search facilities in order to find an accountancy firm near you. Members of these institutes will have to abide by various guidelines and codes of conduct, and there will be complaints procedures if you have a problem with your accountant that you cannot resolve between yourselves.

• The Institute of Chartered Accountants in England & Wales (ICAEW or ACA) www.icaew.com
• The Association of Chartered Certified Accountants (ACCA) www.accaglobal.com
• Institute of Chartered Accountants of Scotland (ICAS) www.icas.org.uk

2. Performing an internet search is one way to find an accountant, but as with any service you purchased, it is better to have a recommendation from someone you trust, than to pick someone randomly. Therefore, speak to other entrepreneurs about their accountants. A positive response won’t guarantee that their accountant would be suitable for you, but it is a good start to learn from their experience.

3. Having found some names by one of these routes, contact a number of firms and request initial meetings to find out more about them, taking care to determine before you meet whether you will be charged for these. Many will not charge for a short initial consultation - but don’t expect them to give you lots of free advice in this.

4. When meeting prospective accountants, be honest about your operation, its size and your future plans, and ask about their experience of similar businesses. An accountant will usually be equally upfront if they don’t think they are right for you, for example, if they usually deal with more complex businesses and charge larger fees as a result. They should point you in the direction of more suitable firms.

5. Ask if you can speak to a few of their other clients, as references.

6. Have some ideas about what you want your accountant to do for you, but of course, one of the reasons you need an accountant in the first place might be that you have no idea of your obligations. An accountant might perform any of the following tasks for you, but don’t assume they will be doing this if you haven’t asked.

• Bookkeeping (recording all transactions of your business in a way that then enables accounts to be drawn up);
• Constructing accounts for tax purposes, and to help you manage the business;
• Completing your personal tax return, and company’s tax return (if relevant);
• Completing VAT returns;
• Managing payroll if you employing staff (including yourself);
• Helping with a business plan, for example, if you are approaching a bank for funding;
• Strategy and tax advice regarding growing a business or selling it.

7. Also, remember accountants are running their own businesses and assume they will charge you for all meetings and advice given. To avoid unexpected bills and to make comparisons between prospective accountants, discuss how you will be charged and what will and what will not be included in any fixed fees. Once you make your choice of accountant, an engagement letter (a contract between you and the accountant) will be drawn up which should include a section on fees, but make sure you are happy this is detailed enough and you understand it.

Ultimately, choosing an accountant involves putting in some effort and only you can make the final decision, but finding the right person to give you good advice from the start of your business, could save you many problems later down the line. However, all businesses grow and change, and as your relationship with your accountant also evolves, you should periodically revisit whether they are still the right providers for you.

As with all our information in The Business Lounge, this is not comprehensive business advice, and may not apply to your specific circumstances.