Insights, small business

How to choose an accountant for your small business

Modulr By Modulr on 6 October 2021   •   4 mins read
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Picking an accountant for your business can seem like a minefield. Search engines throw up tens of thousands of results, and without accounting knowledge, it can be hard to distinguish why one firm is better than another. While it can be tempting to go with the cheapest quote, accountants in 2021 can provide a genuine value-adding service to your business, giving you insights into your commercial performance as well as providing growth advisory services.

So, in the interests of helping you separate the accountancy wheat from the accountancy chaff, we present our top 5 areas of key consideration.

1. Make sure they are in the cloud

In the first instance, you should work with an accountant who retains your accounting records digitally, in the cloud. This allows both you and your accountant to view the same live set of data online and makes collaboration easier, and that’s never been more important than in today’s virtual world. 

Additionally, cloud accounting software allows your business to benefit from all the advantages that automation brings, including seamless banking transactions and automatic reconciliations. This means that income and expenses are updated in your accounts in close to real-time and you’re not paying for the time it takes for your accountant to enter data manually.

Moving to cloud accounting will soon become a necessity due to the Making Tax Digital (MTD) roadmap, so it's worthwhile choosing an accountant who can support this transition today if you haven't done so already. 

2. Make your pick based on sector specialisms

Use an accountant who has expertise specific to your sector. The advantages of doing so include being able to benchmark yourself against your competitors, as well as benefiting from their specialised tax knowledge.

For example, suppose you run an e-commerce company. In that case, it makes sense to assign a firm with several similar clients. This will allow you to receive advice and expertise related to the most appropriate payment processing tools to incorporate, based on their functionality, cost, and ease of importing into accounting software. Additionally, an accountant with detailed e-commerce sector knowledge will be able to identify whether your business may qualify for things such as R&D tax credits. 

3. Advisory services should be on offer 

One of the main benefits of having your financial records digitised and in the cloud is the opportunity to benefit from advisory services such as cash flow forecasting, access to finance, corporate structuring, and tax efficiency. Accountants who can offer these services are worth paying a premium for as they can allow your business to increase revenue and profits, and reduce expenses.

Many of these services are delivered by accountants using third-party software integrations that connect to cloud accounting software. Records must be kept up to date in order to benefit from the widest range of options available and to plan for business scenarios, both good and bad. 

4. Sweep up costs with a fixed fee retainer

Historically accountants used to charge for their time by the hour. However, accountants leveraging technology and automation are increasingly providing services under an annual, fixed fee retainer, with costs smoothed out over monthly instalments. Retainers typically cover compliance filings (annual accounts, VAT returns, etc) but can also incorporate advisory services.

Moving to this model affords clarity and predictability over accounting costs, meaning you can plan more easily and don’t have to worry that it will cost you money each time you contact your accountant with a query. 

5. They should elevate your business with next-level automation

Last but by no means least, you should seek out accountants who can pass on the benefits of next-level automation. This will enhance the speed of real-time data available to your business, allowing you to be even more agile in your approach to supporting internal KPIs, spotting new opportunities, and finetuning company performance. 

Technology can now be used to automate recurring finance tasks, which can then be outsourced to your accountant, allowing you to spend more time on what makes your company unique. For example, Modulr's Payments Dashboard can speed up both payment runs and monthly payroll through a centralised dashboard which connects accounting and banking data.

Switched-on accountants that make the most out of technological tools available to them will be best-placed to help you make the most of your business, so it pays to ensure your accountant of choice is plugged in to the right ones.


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