How to choose an accountant for your small business

Start with what your business actually needs

A sole trader with straightforward income and expenses may need very different support from a limited company with VAT, payroll, employees and regular bookkeeping. Before comparing accountants, make a list of the services you need now and the areas where you may need support over the next 12 months.

Common accountancy services for small businesses include annual accounts, Self Assessment, Corporation Tax, bookkeeping, VAT returns, payroll and tax planning. You do not necessarily need every service, so look for an accountant who can tailor their support to your circumstances.

Check that the accountant is suitable for your business

Ask whether the accountant regularly works with businesses of a similar size and structure. The accounting and tax requirements of a sole trader can differ significantly from those of a limited company, while contractors and consultants may have their own particular requirements.

You should also check that the accountant or tax adviser is appropriately qualified for the work you want them to undertake. GOV.UK recommends checking qualifications and reading the terms of engagement before appointing an accountant or tax agent.

It is also worth considering whether you expect your business to change. An accountant who can support you as you move from sole trader to limited company, employ staff or become VAT registered may save you the disruption of changing advisers later.

Understand exactly what is included

Do not compare accountants purely on the headline annual fee. Ask what work is included and what could result in an additional charge.

For example, find out whether the quoted fee includes annual accounts, tax returns, Corporation Tax, bookkeeping, VAT returns, payroll, routine questions and year-end meetings. A clear scope of work makes it easier to compare proposals on a like-for-like basis.

Also ask how additional work is charged. A monthly fee may cover a defined package of services, while specialist advice, extra bookkeeping or additional tax work may be charged separately.

Ask how communication works

Good communication can be just as important as technical accounting work. Find out who will deal with your questions, how you will contact them and what response times you can reasonably expect.

Ask whether you will have a named contact and whether routine communication is handled by email, telephone, video call or an online client portal. Understanding how the relationship will work before you appoint an accountant can prevent misunderstandings later.

Online accountancy can make communication and document sharing convenient, but a digital service should still provide clear human communication when you need advice.

Consider the software and digital process

If you use accounting software, ask which systems the accountant supports and how information will move between you and the practice.

A good digital process can reduce manual administration and make it easier to keep bookkeeping, VAT records and year-end information organised. It can also give you better visibility of your business finances during the year.

If your business may be affected by Making Tax Digital, check that the software and processes being used are suitable for the requirements that apply to you.

Compare value rather than just price

A low annual fee is not necessarily the lowest overall cost if routine questions, additional filings or meetings are charged separately. Equally, the most expensive package is not automatically the most appropriate.

Look at the combination of services, accessibility, software support and advice you will receive. The objective is to find an accountant whose service matches the needs and complexity of your business.

Ask for a clear explanation of the fees and services before you appoint the accountant. This gives you a better basis for comparing different proposals.

Ask about records and your responsibilities

An accountant can help prepare accounts and tax returns, but you remain responsible for providing accurate and complete information about your business. Good bookkeeping and record keeping therefore remain important even when you use an accountant.

For example, self-employed businesses generally need records of income, expenses and other relevant information so that profits and tax can be calculated correctly. Keeping records organised throughout the year can also make the accountant’s work more efficient.

Ask the accountant what information they will need from you and how often they expect you to provide it. A clear process can make the relationship much easier to manage.

Questions to ask before choosing an accountant

Before making a decision, consider asking: What is included in the annual fee? Who will handle my accounts? How do I contact you? What software do you use? How are additional services charged? Can you help with tax planning? What happens if my business grows or changes structure?

You can also ask whether the accountant regularly works with businesses like yours and what information they will need from you throughout the year.

Getting clear answers before you appoint an accountant can prevent misunderstandings later and make the working relationship much easier.

When should you change accountant?

You do not have to stay with the same accountant if their service no longer meets your needs. You may decide to change if your business has grown, you need additional services, communication has become difficult or you want a different approach to digital accounting and tax support.

If you decide to change, ask your new accountant about the handover process. They can normally explain what professional information and records will be needed from your previous accountant so that the transition is as straightforward as possible.