For the successful entrepreneur, the right time to choose an accounting firm for the startup is when you are still developing the idea fully.
You should be looking to get your financials in place to provide you with the firm foundation you need to launch your startup.
Using the services of the professional accountants can put you in the best position for subsequent growth and development.
It’s important that you build an understanding about how to choose an accounting firm in London for a startup because not all that sparkles is gold, and not all accounting firms are experienced at working with young, high growth startups.
Below are several points to consider when looking to engage an accounting firm for your startup.
Do you need an accountant in a startup phase of your business?
Yes! You should definitely talk to an accountant when developing the startup idea.
An accountant can help with business plans, including the financial forecasts, provide suggestions for raising finance, and the regulatory issues, such as whom to notify that a new business has started.
Once you decide to launch a startup, the accountant can help choose which business format works best for a client – basically sole trader, partnership or limited company.
This is important because it affects many other issues such as getting the correct letterheads, addressing patent rights, filing the correct paperwork with HM Revenue & Customs, etc.
Now let’s see how to choose an accounting firm for a startup.
1. Identify your needs
Ask yourself exactly for which financial tasks you need their expertise, such as whether you require an accountant simply for your annual accounts, or if you’d prefer that they do everything from payroll to bookkeeping and VAT returns.
This is specific to your business circumstances and how much time, energy and money you deem necessary to commit.
2. Do your research
It is not a great idea to just go with the first result on a Google search while choosing an accountant for your startup.
The most well-known and biggest firm might not be the best fit for your requirements.
You need to look into practices whose values align with yours and that are a match for you.
You need to work with a firm that understands the challenges that your startup may face.
In this regards, it might be a good idea to go with a firm that is of a similar size to your own.
Apart from the fact that their prices are more likely to be in your ballpark, they are more likely to have advised similar-sized startup business to yours.
It’s more than reasonable to ask them whether they have worked with industries of a similar stage and size to yours.
3. Create a shortlist
After checking the qualifications, services, reviews and experience of accounting firms prepare a shortlist with the minimum of two, and the maximum of five accounting firms that you want to call because contacting too many firms will only serve to confuse your final decision.
At the time as drawing up the shortlist, make a note of those things you want an accountant for.
4. Ask questions
Do not be afraid to ask as many questions as you need.
Engaging an accounting firm is a significant step which is not cheap, so you need to make sure that you are making the best choice.
Ask them about what other businesses they have worked for that are similar in terms of size and industry of yours, you can also ask them what services they can provide you now and how their services might evolve as your business expands.
5. Don’t forget to agree fees upfront
Accounting firms offer different levels of engagement for different needs, so don’t be afraid to ask about what the fees cover.
Make sure you are clear on fees and costs upfront to avoid billing shocks later on.
Many accountancy firms charge monthly retainers while others bill an hourly rate.
Ask for an estimated annual charge based on the services you need.
While the budget is important, don’t choose an accountancy firm purely on cost alone.
More experienced accountants may work faster and save you more money in the long run.
If everything looks good and seems like you have identified the right accounting firm for your startup, ask to see their references as it enables you to hire them with confidence and insight into how they operate.
Final thought
Among many critical decisions, choosing an accountancy firm is one of the most important decisions you’ll make in the life of your startup. The best finance professional in your team really can make all the difference between success and failure.
So choose a firm that helps you manage finances legally and responsibly, while still assisting you as a business owner to receive as high a tax return as possible.
Article by 123Financials
