Top 10 tips for choosing a limited company accountant

Most small limited company owners say that their accountant is their most valuable advisor; a good accountant will keep your books in order, help with tax planning, and will ensure that you meet all your tax deadlines. Here are some tips from the ByteStart team to help you choose the best accountant.

How to find the best limited company accountant

1. Research your options early-on

Consider choosing an accountant before you start your business, or as soon as you can, as they will be able to advise you on start-up expenditure, and how to register with the tax authorities. They will also be able to form a company on your behalf, register you for Corporation Tax, VAT, and set up your payroll if this is the route you want to take.

2. Make sure your accountant is qualified

Make sure that all prospective accountants are fully qualified. Most firms are members of a recognised accountancy body such as the ICAEW (Chartered Accountants), ACCA (Certified Accountants), or ICAS (in Scotland).

3. Use a small limited company specialist

Make sure your accountant has experience of dealing with other small businesses, particularly other businesses within your industry. If you are a contractor or freelancer, for example, you will typically be better off talking to a specialist accountant rather than a ‘general’ firm, as there are specific tax laws you will need to be aware of, such as IR35.

4. How much will your accountant cost?

Find out what fees your accountant will charge. Are they annual fees, or monthly? Are there any entry or exit fees? How much will extra work be charged at – if it falls outside the agreed tasks to be performed for your business? Will they charge any ‘catch up’ fees if you’re moving from another accountant before your company year-end?

5. What services are included?

There are a number of  core duties all accountants should carry out (such as setting up a payroll, completing your company annual accounts if you run a limited company, accounting for VAT, dealing with HMRC, etc.). Will they also complete your self assessment returns (essential for a sole trader, but if you’re a director, this is a personal cost), provide references for mortgage / letting purposes? Do they provide IFA services?

6. Talk to several accountancy firms

Always contact several firms when choosing an accountant. You should get a feel of what it will be like as a client from your initial dealings with each firm. It is essential that you feel like you can build a good relationship, so your intuition will be the best guide at this stage. Ask if you can meet each accountant and discuss your needs before signing up.

7. What size of firm are you comfortable dealing with?

At ByteStart, we often find that smaller firms of accountants tend to understand the specific needs of smaller companies, and can often be more ‘reactive’ than larger firms. This is very much a personal decision, however, and you’re likely to get a ‘feel’ for one of the accountants you get in touch with. If you’re a professional contractor, from personal experience, we would suggest you keep clear of the larger ‘factory line’ accountants; profit is the key motive for many of the big players, rather than keeping clients happy.

8. Communication

From our own experience, the biggest problems we have found with accountants in the past involve poor communication. Your business could face penalties if paperwork isn’t returned to the authorities in a timely manner, and waiting days for a reply to a tax question can also be very frustrating.

9. Technology

Does your accountant work with all of the leading online accounting software packages, such as Xero, Sage and FreeAgent? This type of software has revolutionised life for both accountants and their clients. It has never been easier to keep your accounts up-to-date and view the status of your payments and tax liabilities instantly. If an accountant hasn’t adopted cloud software yet, they are best avoided. Ironically, it has also never been easier to switch accountants, thanks to cloud accounting software.

10. Recommendations from someone you trust

One final piece of advice is to ask other small business contacts if they recommend their own accountants. You simply cannot beat a recommendation from someone you trust.

Further Resources

For more information, try the ICAEW pages on choosing an accountant or the ACCA. Both have directories of member accountants. If you’re a professional contractor, try this specialist guide to contractor accountants.

Last updated: 22nd March, 2022

Combine all of your old pensions into one simple online plan

Sign up in 5 minutes - over 600,000 users, including the Bytestart team!

Superscript no-ties business insurance - pay monthly

Tailored just for you + pay monthly. You could be covered in just 10 minutes.

Tide Business Bank Account - £40 welcome bonus!

Exclusive for Bytestart readers + 12 months' free transfers. Find out more.

FreeAgent Online Accounting - 55% off - ByteStart exclusive!

Brilliant software. Get 55% of your first 6 months, then 10% for life.

Related articles

  • Staying on top of your company accounts – book-keeping do’s and don’ts

    There are three reasons you need to be on top of the money coming in and going out. HMRC will need information from you at some point (whether you are a sole trader or run…

  • How ‘Simplified Expenses’ can save you time if you’re self employed

    Claiming business expenses can help you to cut your tax bill but, knowing what, and how much you can claim for isn’t straightforward. Fortunately, HMRC allow the self employed to use ‘simplified expenses’ to claim…

  • small business accountant

    15 questions to ask when hiring an accountant for your small business

    While selecting an accountant can be a vexing process, especially if you are a new business startup, it’s much simpler if you approach it systematically and ask the right questions. So to help you find…