Discover How to Find the Right Accountant for Your Business

Accountants are often seen as the people you go to when you need help with your taxes, but the truth is they do far more than that. If you’ve landed on this page, it’s likely that you’re either looking for your first accountant or looking for a new accountant. Depending on your stage in business, budget, business goals or financial acumen, one type of accountant might support you more appropriately than another.

If you’re keen to delve deeper into how the stage you are at in business might affect your choice of accountant, It is also worth researching “when to hire an accountant’.

Had we written this blog in 2019 we would have also included location as a factor, and for some there is a preference to work with an accountant they can meet face to face. But since 2020 most accountants now support clients remotely and therefore the choice of whether you should look for a local accountant has minimal influence on service level, but is more of a personal preference.

This blog provides information on finding the right accountant for your business. It explains the various types of accountants available, their respective pros and cons and outlines the different areas of support that they can assist with. The accountants include Tax Vertical Experts, Tax Specialists, Outsourced Finance Director / Finance Function, Niche Vertical Accountants, Compliance Accountants, Economies of Scale Accountants, Bookkeeping Firms, Generalist Accountants, and Audit firms.

Types of Accountant:
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1. Tax Vertical Experts
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Some accountancy firms, especially larger ones, have staff that have an incredible depth of knowledge in very specific areas whilst having very little in other areas of accounting. The big four accounting firms are the most extreme examples of this.

Pros:

These are often larger firms with offices abroad meaning they can help if you are looking to set up companies cross-borders. In their particular area of expertise, advisors will know almost everything

Cons:

Some of the highest costs.
Advisors may not take into account other implications. E.g. A VAT expert will discuss VAT implications but not know that Corporation Tax is also affected.

2. Tax Specialist
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Some firms are boutique tax specialists, they will rarely do your compliance work (submissions of accounts and tax returns), but offer a specific service aimed at providing advice around niche tax areas. They also sometimes work via partnerships with other accountants.

Pros:

Often exceptional at tax, especially identifying the implications of a given action or advice across various taxes.
They can often help with more niche taxes such as double taxation treaties or specific VAT exemptions.

Cons:

Often the highest cost accountant
Most accountants can deal with a good proportion of tax advice, especially more general tax advice so a specialist isn’t always needed
Rarely support outside of tax, so they won't be submitting your accounts

3. Outsourced Finance Director / Finance Function
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These firms focus on the commercial impact of their advice, These often have the most commercial impact.

Pros:

Very good for fast growing and ambitious businesses.
Generally well versed in growth strategies and connecting the dots between accounting and business.
Increase efficiency so they often save a lot of costs and human error in a finance department.
They are generally knowledgeable about the tax implications for clients and industries they work with
Stryde operates as this type of accountant.

Cons:

Need to work with tax specialists for more niche tax advice.
Sometimes a higher price than some accountants such as Generalists, Compliance, Economies of Scale and Bookkeeping Firms (see below).

4. Niche Vertical Accountant
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These firms focus on one particular niche and try to understand it really well. They often refuse clients from any other area and provide wider support related to the industry they work in.

Pros:

Have a lot of industry/sector knowledge that can add value to a business beyond accountancy.

Cons:

Not great for people who have multiple business interests or want to diversify outside the given niche
Advice is industry specific so knowledge can sometimes be siloed.

5. Compliance Accountant
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These firms focus on delivering returns to HMRC and Companies House only, they don’t provide any additional advice. Many Compliance accountants also fit into the Economies of Scale type.

Pros:

Often quite cheap
Usually very simple to work with

Cons:

You pay for what you get. There is limited or no advice provided around tax and/or forward planning.

6. Economies of Scale
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These accountants are very clear that they are focused on providing the cheapest service they can. They sometimes have their own software as part of this. Many payroll specific firms fit into this category.

Pros:

For simple businesses they do this very well and at a very low cost

Cons:

They tend to have low attention to detail and try to fit every customer into a predefined structure and process to help with keeping the cost down.

7. Bookkeeping firms
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Not actually accountants but often mistaken for accountants, they complete data entry tasks and occasionally also complete VAT returns. They are often combined with a compliance or generalist accountant.

Pros:

Focused on data, often the most cost effective for bookkeeping specific services.

Cons:

Not actually an accountant so rarely have depth of knowledge.

8. Generalist Accountant
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The majority of accountants fit into this category, they try to be all things to all people.

Pros:

If the person you deal with is high quality and attentive then you can have a good experience, but no real benefit over other types of accountants.

Cons:

It's real potluck what you get. They attempt to do all of the above, but rarely do anything particularly well.

9. Audit
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An Audit firm is specifically qualified to carry out audits.

Small companies are generally exempt, these are companies where two or more of the following criteria are met for two consecutive financial years:

turnover is no more than £10.2m
total assets are not more than £5.1m
average number of employees

https://www.gov.uk/audit-exemptions-for-private-limited-companies

The rules are different for charities, these can be found here:

https://www.gov.uk/government/publications/independent-examination-of-charity-accounts-trustees-cc31/independent-examination-of-charity-accounts-trustees

Pros:

Only firms qualified to complete audits can do them
It is a legal requirement that Audit firms can help you with

Cons:

Seen as unethical to use the same firm for both audit and general accounts so this is often an additional relationship.

Areas of Support
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The following list isn’t an exact science, but a guide to what is commonly seen, some accountants try to be more than one ‘type’ of accountant. It’s also worth noting that most accountants can, to some degree complete all of the following tasks, and if price is a primary decision making factor then it may be that an economies of scale accountant, generalist or compliance accountant could work. But we have chosen to highlight who will generally give you the best advice assuming quality is the primary goal. The areas an accountant can help you with at this stage are:

1. Business Structure
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Choosing the most appropriate legal entity (e.g. sole trader, limited company, limited liability partnership) and identifying share class structure (limited company) including relevance of holdings company/subsidiaries.