22 Jan 2025
Image: Adobe Firefly AI
Selecting an accountant can appear a daunting task, but if you choose correctly, they can become a valuable asset to your practice, as they will not only handle your financial and operational affairs, but will be able to offer professional business advice on a number of other topics, too.
Because you will need to give an accountant detailed access to business information, it is crucial that you choose well. Remarkably, anyone can set themselves up in business and style themselves as an “accountant” or “tax advisor”, but only those that are professionally qualified and belong to the appropriate body can use the terms “certified” or “chartered”. Choosing badly could be worse than having no advisor at all and, importantly, practices need someone who can help find fraud.
Frauds in veterinary practices are as big a problem as they are in any other sector, and a good accountant putting the books together may be able to look at them with enquiring eyes, seeing what others cannot. Of course, they will do much more than that. This article has tips to help you find and use an accountant that suits your needs.
The first step is to identify the areas where you need support and what you need an accountant to do. Consider the complexity of your accounting needs. Evaluate whether it is just end-of-year financial statements and tax returns, or if you require support throughout the year with matters such as PAYE, corporation tax, VAT, or income tax, IR35 and locums.
Also, try to foresee any future requirements you may have – especially with regards to raising external finance and expansion, and consider whether your accountant is equipped to deal with these areas.
Big is not always better. Smaller accountancy firms can often be better suited to the smaller business. An accountant running a small practice is a business owner just like you and will know what it is like.
Also, consider your personal needs and preferences. Would you prefer to work with one person on a day to day basis or would you feel more comfortable knowing that a larger team is dedicated to your business?
Who will be the main point of contact and are you happy with them?
Make sure that the accountant has previous experience working in the veterinary sector, or at least health care. It is not essential, but experience working in the profession or similar will be a good indicator of an accountant’s suitability, and suggests they have some good business insight into the veterinary market.
Can you get any personal recommendations – even from friendly rivals? Accountants found this way will come highly prized.
Arrange to meet with a few accountants, so you can compare services and fees. As with any business or financial decision, value for money should be a key consideration when deciding, remembering that you will get what you pay for – cheap isn’t always the best.
Agree fees and charges upfront, along with how and when you will pay.
It is vital that you understand what the fees include; for example, is advice included, or will you be charged at an hourly rate for any one-off questions you may have?
Many businesses are facing cashflow pressures and an accountant may be able to adapt their fee and charging schedules to help.
Consider how the accountant will add value besides bookkeeping.
Your primary consideration when choosing an accountant should be the value they can bring to the practice.
While their primary task is ensuring all your accounts are in order, it is their ability to deliver specialised expertise and resources that should lead to a successful business relationship.
Try to gauge whether they are able to provide services outlined and beyond your bookkeeping needs.
Ensure that the accountant you choose has a professional qualification and belongs to a professional body.
You may come across people offering “accounting services” that are unqualified. These “accountants” are unlikely to carry liability insurance and any apparent fee savings may turn out to be far more costly in the long run.
A professional qualification also means the accountant will be required to learn continuously – and can be disciplined by their professional body if they fail to act professionally.
Professional bodies will usually have member directories available, allowing you to search for a qualified accountant near the practice.
Look for a qualification from a professional body such as Association of Chartered Certified Accountants, Institute of Chartered Accountants in England and Wales or Chartered Institute of Management Accountants. The six professional bodies are overseen by the Financial Reporting Council.
Links to the organisations are available at tinyurl.com/yw2brc95
Ensure the accountant is someone you can work with, as they will be a key business advisor. It is of utmost importance that you trust the person who will be handling your finances and feel comfortable to ask them any questions you may have.
Most accountants will offer a free initial consultation, allowing you to assess how successful your working relationship might be. A breakdown in communications between you and your accountant may lead to financial confusion, hassle and, ultimately, expense to you and the practice.
If an accountant has to spend time wading through invoices or compiling the books, you should expect to pay handsomely for this. That said, the direction of travel from HMRC is towards digital record keeping and submissions of returns via a programme it has introduced, Making Tax Digital, which is forcing the matter.
Any accountant you engage should be able to brief you on how best to keep records – given the size and nature of the practice and its structure (sole trader, partnership or company) – and software that can take the sting out of the process.
Check if any software recommended can deal with deposits and products you may offer on the side, as well as the normal reporting obligations.
Many accountants have “preferred” packages that come with discounts on the monthly subscription, and if the accountant is more skilled or familiar with a package, then they will be able to help you much more easily than if you have opted to use software they do not use.
Lastly, it is worth noting that HMRC levies penalties for not keeping proper records.
The self-employed and partnerships should keep records for five years after the filing date of 31 January; for companies, it’s six years after the end of the accounting period. In both cases, records should be kept for longer if HMRC is investigating.
Accounts for companies are a legal requirement and need to be in a defined format. But for sole traders and partnerships, whatever is produced tends to be written for the self-assessment return.
An accountant is an essential advisor for any business – indeed, HMRC asks if professional advice has been taken when compiling a tax return – so investing time in choosing the right person is imperative to gaining maximum value.
Consider the person, not just the price. Low cost does not always translate into a good working relationship.
