How to choose an accounting firm

The main difficulty in choosing an accountant is that "accountant" covers work ranging from filing a tax return once a year to sitting in on board meetings. Firms are often reluctant to say which end they are at, because they would rather not turn work away.

Work out which job you are hiring for

Compliance. Annual accounts, tax returns, statutory filings. Necessary, deadline-driven, and largely the same from firm to firm.

Bookkeeping and payroll. Ongoing recording of transactions and paying people. Often the biggest line in the fee and often the part that gets delegated.

Advisory. Structuring, forecasting, planning, financing, sometimes acting as an outsourced finance function. This is where firms genuinely differ, and where the wrong fit costs the most.

A business needing the first is well served by a firm that does it efficiently and cheaply. A business needing the third and buying the first will get filings on time and no help at all.

Qualifications and who is regulated

In most markets, some accounting titles are protected and some are not. Anyone can call themselves an accountant; a certified or chartered designation means a professional body has qualified them and can discipline them.

For audit work the requirements are stricter still, and audit registration is publicly checkable.

Ask which body the firm and the individuals belong to, and confirm it with the body rather than with the firm.

How fees are structured

Fixed fee. Agreed in advance for a defined scope. Predictable, and the scope is what matters — ask what falls outside it.

Hourly. You pay for time. Fair, but it makes you hesitate before asking a question, which is usually the opposite of what you want from an accountant.

Monthly retainer. Common for ongoing work. Ask what is included and what triggers an additional charge.

The question that reveals most: what have clients like me been billed on top of the quoted fee in the past year, and for what? Every firm has an answer. Some will give it to you.

Fit matters more than it sounds

Ask whether the firm has other clients your size, in your sector, and at your stage. A practice whose clients are all established businesses may be excellent and still be wrong for a company that changes shape every quarter.

Ask who will actually do the work and who you will speak to. It is common to be sold by a partner and served by somebody you have not met. That is not a problem in itself, as long as you know.

Software

Most firms now work in a particular accounting system and are far more efficient in it. If you already use one, ask whether they do too. If you do not, ask what they will put you on — and whether the licence and the data are yours if you leave.

That last point is worth pressing. Ask directly what happens to your records if you move firms, and how quickly you would get them.

Questions worth asking

1. Which of compliance, bookkeeping and advisory are you proposing to do?
2. Who does the work, and who do I call?
3. What is not included in the quoted fee?
4. What do you need from me, and by when, for each deadline?
5. If I leave, what do I take with me and how long does it take?

Changing firms

It is ordinary and the profession has a process for it. The new firm writes to the old one, which hands over the records. Fees owed must usually be settled first, and a firm may be entitled to hold records until they are — which is a reason not to let a dispute build up while a deadline approaches.

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This guide explains how accounting services differ. It is not tax, accounting or legal advice, and it does not recommend any firm listed in this directory. Confirm qualifications with the relevant professional body.