Selecting an accountant

signs_of_recovery

Has anyone got any advice for how to pick an accountant?
I am starting my own business. It will either start up as a sole trader or as a limited company with me employed in the company.
Not sure about that yet.
However I would like some advice on selecting an accountant. The last company I worked at was a limited company, and the accountancy firm seemed to get paid an awful lot of money (over 6000) simply to produce a set of end of years accounts, the annual return and deal with payroll for two people. The boss (my father in law) did not seem to be able to get any advice from the accountant, or help in minimising tax, national insurance etc etc. (I did the VAT & the book keeping) and his accountant was always very reluctant to give advice.
My mother in law has someone do the books for her sole trader business, then everything gets sent to an accountant elsewhere, and she never hears anything from them again. (yes, we've tried to get her to pull her head out of the sand, but she won't. Her company is 50000 in debt, and she claims that this is why the business pays no tax. No idea if that's true or not!)
I have no idea how to stay out of these situations. How do you choose an accountant and be confident that he or she is doing the best for your company or you as a self employed person.
Any advice?

zygurat789

You're small so look for a small firm, typically a sole trader, again somebody not too far from your own age group. Look locally so it's
convenient for you to visit them. Ask around. Go for an introductory meeting (no obligations). Find out how you should keep your books. Always ask about fees and what you will get for your money.
Remember your accountant can best advise you on whether to trade as a sole trader or a limited company.
Just some thoughts.

Cook_County

Ask about:

1. Their qualifications as they may have none!
2. Their prices.
3. How long they have been in business.

Ask yourself if you are comfortable with them.

simpywimpy

we have a turnover of 100k and 5 employes. As a ltd co, we pay our accountant £500 for the end of year return etc. The more work you do yourself in getting the accounts in order, the less there will be for the accountant to do.

Get signed up with the business advisor in your area, they are great for info and advice on start up and saving money

Payroll is much simpler than you think with the new online services. It calculates everything for you and keeps all the records and files online. Ive no previous experience of payroll but manage all ours myself. There are even free courses with HMRC on a variety of subjects.

happypuppy

Does anyone think an accountant fee of £200 for a soletrader with a turnover of 4000 is a fair sum ?

yorkshire_laura

happypuppy wrote: »

Does anyone think an accountant fee of £200 for a soletrader with a turnover of 4000 is a fair sum ?

yes that sounds similar to what would be charged where i work.

Cook_County

Sounds very cheap to me since they have to pay their professional indemnity insurance, rent, overheads, continuing education etc out of it AND make themselves a profit to live from.

What qualifications do they have?

pitkin2020

happypuppy wrote: »

Does anyone think an accountant fee of £200 for a soletrader with a turnover of 4000 is a fair sum ?

that is about right, but it does depends on how much work your doing yourself, if your simply handing him the accounts at the end of the year to complete its a good price.

pitkin2020

Cook_County wrote: »

Sounds very cheap to me since they have to pay their professional indemnity insurance, rent, overheads, continuing education etc out of it AND make themselves a profit to live from.

What qualifications do they have?

What a load of rubbish, each accountant will have his or her own set of expenditure and will vary greatly from each firm, a firm running 20 accountants will be charging more than the sole trader accountant who works from home, doesn't mean the small guy is any less qualified to do the job, and i bet you the small guy charging £200 for simple end of year returns for small businesses is earning profit more than the accountant who works in the big flashy office charging £500 for doing exactly the same work!!

For someone with a turnover of 4k most accountants could complete the return in a matter of a few hours so could do 2 or 3 similar sets of accounts in a day.

TO THE OP
Looking for an accountant is looking for a good mechanic, you will want someone you will feel comfortable with, who offers advice and gives you some input and you want to be dealing with one person every time.

And as for indemnity insurance its not worth the paper its written on, if your accountant screws up your books the buck stops at you and it will be you and only you that has to face the consequences

Cook_County

pitkin2020 wrote: »

What a load of rubbish, each accountant will have his or her own set of expenditure and will vary greatly from each firm, a firm running 20 accountants will be charging more than the sole trader accountant who works from home, doesn't mean the small guy is any less qualified to do the job, and i bet you the small guy charging £200 for simple end of year returns for small businesses is earning profit more than the accountant who works in the big flashy office charging £500 for doing exactly the same work!!

For someone with a turnover of 4k most accountants could complete the return in a matter of a few hours so could do 2 or 3 similar sets of accounts in a day.

TO THE OP
Looking for an accountant is looking for a good mechanic, you will want someone you will feel comfortable with, who offers advice and gives you some input and you want to be dealing with one person every time.

And as for indemnity insurance its not worth the paper its written on, if your accountant screws up your books the buck stops at you and it will be you and only you that has to face the consequences

pitkin2020: I suggest that you read the following quote on the right of your screen before rushing to your keyboard in such haste:

Forum Etiquette

Pls be nice to all MoneySavers. There's no such thing as a stupid question, and even if you disagree courtesy helps.

The reason I stress what I did above is based on some 30 years of experience and indeed frequent speaking at public events on how to choose a tax adviser and accountant. I do actually know what people want and where and how relationships go bad.

The word "acccountant" requires zero qualifications within the United Kingdom. All of the professional bodies require mandatory professional indemnity insurance of their members. This means that if you get bad advice so you - the client - end up a million pounds worse off and end up suing the adviser that there is an insurer standing behind the adviser, so that you have a chance of being compensated by an insurance company even if the adviser has not got the money.

We know nothing about the £200 quote here, the adviser may be brilliant ... or just a cowboy. The questioner needs to ask more of the person giving the quote than we currently know.

HornyDevil

At £200 they certainly aren't massively overcharging. Assuming you have 30 minutes when the client come in, 2 hours to do the work and 30 minutes to go through the end results it's only £66 per hour. Bearing in mind if they are using a tax program to do the submission there is then the cost of a slot on their licence (say £30) plus all the usual overheads.

Going back to the comment about a good mechanic how much do you pay for (potentially) a 17 year old semi trained monkey to do the service on your car at a main dealer? £50+ an hour?