Relying solely on inexpensive or free small-business accounting tools instead of investing the services of a trained professional accountant can be a costly mistake that we see businesses make all too often. Don’t be one of them.

Paying for a professional accountancy firm can be worth every extra penny you spend. A qualified, certified accountant can make you aware of potential financial mistakes as well as offering tax saving opportunities that you might not know exist. We doubt most barebones digital accounting solutions could bring red flags like these to your attention as effectively as an accountant face to face.

When you do invest in the services of a reputable accountant, it’s important to know what to ask and when — not only to be sure you’re getting your money’s worth, but also to ensure he or she helps you do what’s best for your business.

Here are our favorite questions to ask when hiring an accountant.

1. What’s the best way to contact you and how often should we be in touch?

Establish early on how often you’ll connect, either in person, on the phone or via email. We’d always prefer to hear from you too much than not enough. Clear, effective and frequent communication is the key to a beneficial relationship with your accountant. We can provide much better advice being proactive as opposed to reactive.

2. How can you help me get my taxes in order?

We know that the main reason that clients hire an accountant is to get their tax returns correct and to legally minimise their liabilities. The best way we can help you in this regard is to receive the information in good time which enables us to review everything, explore all options and let you know what your liabilities are well ahead of deadlines.

As a firm of Chartered Tax Advisers we have the expertise to help with a wide variety of tax issues for both businesses and individuals whether its Income Tax, Capital Gains Tax, Inheritance Tax, VAT, National Insurance or Corporation Tax. 

3. What should I be consulting with you about on an ongoing basis?

A skilled accountant will get to know you and your business well enough to keep you up to date and reacting to any financial matters that could affect your business, for better or for worse. 

Your accountant should be open to assisting you in weighing the financial ramifications of certain decisions, like whether to outright purchase, hire purchase or lease equipment, whether to hire an independent contractor or a full-time employee and so much more. We would always encourage you to speak to us before any significant decisions as sometimes waiting a few weeks to make that important capital purchase might just save you more tax than buying it immediately. 

Your accountant should also work collaboratively with you in a way that makes it easy for you to consider and understand which actions you need to take now and in the future, ideally without any accounting jargon.

4. How can you help me grow my business?  

A qualified accountant can help small-business owners expand over time, that is if you have the right groundwork in place. To grow, you must start with a financial model that is honest and built on a granular basis from the ground up. Remember to update your plan on a monthly basis (or ask your accountant to) with actual results. Doing so can help you hone in on opportunities for growth in your market.

Sometimes it is also important to realise when it is time to consolidate your position. Growth is all well and good but if it comes at the expense of your cash flow you could soon find yourself in a position where you’ve not got enough money to pay your suppliers, staff or taxes and then things get difficult. So on to the next question…

5. How can you help me manage my cash flow?

Properly projecting your business’ cash flow is arguably the most important part of running a business. Turnover and profits are important but it is cash that fuels your business. Detailed, realistic, cash flow projections aren’t easy to put together so why not ask your accountant to help?

Your accountant should be able to help you develop an organised, effective cash flow model that allows you to adjust your operations in ways that help you predict and manage times when cash may be tight. 

6. How much profit am I making?

All too often we’ve seen clients drop in their books and records delighted at the year they’ve just had only to find that once the accounts have been produced they’ve actually made considerably less. Good for the tax bill but nobody really wants to pay less tax by earning next to nothing for a year of hard work. 

Information is the key. By producing regular management accounts we can keep you informed throughout the year which will avoid any nasty tax surprises but also enable you to make informed decisions such as raising prices or shopping around for new suppliers in near real-time. 

7. What are some special considerations for my particular industry?

Businesses in different industries come with their own unique accounting issues. Your accountant should be knowledgeable about the various ones that specifically apply to yours.

For instance, if you are in the construction industry, your accountant should be well-versed in the construction industry scheme and if you’re in a technology sector then maybe you need to consider Research & Development tax reliefs.

8. What software should I use?

In the same way that all businesses have their own unique accounting issues, so do they all have different requirements for software. What works for one may not work for another. Your accountant should be able to review your circumstances and recommend a system that works for you rather than trying to make you work around a system that suits them.

At Horn & Co. Accountants we most often work with Xero nowadays and as a certified partner are well placed to assist with all aspects of the software but we also have a wealth of experience with Sage, Quickbooks and others. We are also familiar with a variety of apps and add-ons which can make your life easier and integrate seamlessly into the way you work. 

We are also available to provide telephone and email support should you have any queries when using the systems.

9. What are some common mistakes that I should avoid when working with you?

Failing to request the advice of your accountant is probably the worst mistake. The whole point of hiring an accountant is for their expert advice. There will never be a charge for picking up the phone and asking a question, it is all included in your fixed fee. Should we have to do more work to properly answer your query you will be notified and a quote put together before work commences. 

Other common mistakes include not working with us in the agreed fashion. At the initial meeting everything will be discussed with you and a way of working agreed moving forwards. If you’re unable to stick to that, such as if you can’t provide the information required in the agreed timely fashion then we can’t be as effective as either of us would like.

If you have any questions or would like to speak to one of our team give us a call on 02392 005124.