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ByteStart’s Start-Up Guide – Part 9 – Accounting for your new business

October 11, 2011

When you start up your own business, one thing’s for sure – money isn’t going to be in abundance to begin with. It goes without saying that it will go a lot further the more self-sufficient you are in the early days. But if there is one area where it’s worth shelling out for professional help, it’s with your accountant.

This is especially true if you start a limited company. Sums aren’t everybody’s cup of tea. More than that, negotiating your way around tax codes, tax liabilities and the like can be a minefield if you don’t know what you’re doing. And as we’ve said in earlier sections, ignorance of the law is no excuse.

A good accountant will save you a lot of time

Leave this part of your business to those who know best. Find yourself a reliable accountant and you’ll have more valuable time to spend doing what you do best: building your business.

A good accountant won’t just be there to fill out the corporate tax return and keep you legal. They will advise how to keep as much of the wealth you are generating as possible and always be looking for ways you can save money. The best accountants save more than they cost.

In a best case scenario, you should seek out a trusted accountant with a good reputation before you even start your business. They should be fully qualified, either as a certified or chartered accountant – just look for ACA or ACCA after their names on correspondence or their firm’s website.

Look for relevant expertise

Ask them for proof of experience in handling businesses similar to your own, not just in terms of size, but in terms of sector too.

Generally speaking, we would say that smaller businesses are more compatible with smaller accountancy firms rather than the international accounting giants.

Similarly, as you chat away, make sure that they are the kind of person you are going to be able to get along with. In order to establish a relationship of trust, you will need to connect at a certain level. If need be, ask for references from other clients. Better still, ask friends who already run a business for recommendations.

Find out how they charge

Find out how your new accountant intends to charge you. Can it be a pre-agreed monthly or annual amount, or do hourly fees apply? Compare these figures for three firms if possible.

If you need to keep costs ultra low, consider using an independent book-keeper to do the actual paperwork. They usually work out cheaper than accountants’ bookkeeping services.

Equally, find out about the services they offer? Do they just offer completion of your corporate tax returns, or is in-depth business advice on the cards too. Remember, the more they can advise on all financial matters, including your own personal tax affairs, the more impact they will be able to make.

Above all, make sure your relationship with your accountant is an all-year-round one, rather than one where they contact you once a year. If your accountant isn’t up to speed with your venture’s progress, how can they offer the best advice?

Our guide to choosing a good accountant offers further help on this.

On to ByteStart’s Start-Up Guide – Part 10 – An overview of National Insurance (NI)

Back to the ByteStart’s Start-Up Guide Index