Why an accountant could be your best business ally
Choosing an accountant is one of the most important things you should consider when setting up your private therapy practice.
You may choose to go it alone, without an accountant, especially if you’re a sole trader. In general, the basic bookkeeping for your private practice can be done by you or an assistant, particularly if you have good practice management software.
However, the services and support of a good accountant can be invaluable and will help you get on with what you do best.
What an accountant does
An accountant offers a range of services, including:
- tax advice and help with your tax return
- VAT records
- preparation of your annual accounts
- PAYE and help with payroll if you have employees
- advice about the growth of your practice
How to choose a good accountant
- Think about what you NEED. Do you need financial reports, and annual accounts? If you’re a sole trader, probably not. Do you need help with payroll? What are your plans for growing your private practice - will you need advice? Do you just need help with your tax return on an annual basis? Whatever you need, your accountant will be able to tailor services to you - keeping it affordable.
- Start looking for an accountant in plenty of time. Don’t leave it until January when you have to submit your online tax return. Giving yourself time will enable you to make the right decision.
- Get recommendations: ask your colleagues, close friends, even your solicitor.
- Get a shortlist: have a look at their websites and find out about their fees (they can vary dramatically).
- When you have a shortlist, don’t just rely on email: speak to them over the phone, or even visit them. You’ll get a good idea of whether you will be able to get on with them and have a good working relationship - something that’s vitally important. This is probably not your area of expertise, so ask them about their service and evaluate how they reply. Are their replies clear and easy to understand? Do you feel helped and respected, or do you feel stupid? Find out whether they will provide a pro-active service - reminding you when to provide them information, or when your tax return is due.
- Check professional qualifications. Some accountants don’t have any! There are many different accountancy associations. The most well known association is the ACCA (Association of Chartered Certified Accountants). Other respected associations include the Institute of Financial Accountants, the Institute of Certified Bookkeepers and the Association of Accounting Technicians. If you are a Limited Company, we would recommend that you look to a suitably qualified Accountant, as they are best-equipped to deal with the formation of limited companies and Companies House.
- Before you make your final decision, get their fees in writing. Make sure they understand exactly what services you need, and get a clear breakdown of how and when you will be charged.
- Check whether they have professional indemnity insurance - this will come in handy if the accountant’s advice is disastrous (that hopefully won’t happen!)
- you may also wish to consider insurance relating to being investigated by HMRC (tax investigation insurance) - it’s usually affordable
- if you discover that you don’t get on, you can change accountants - don’t feel that you have to put up with a service that you’re unhappy with
- every business, whether a sole trader, partnership or limited company, needs to set the dates for their financial year. Many choose January 1st to December 31st, but, particularly for new businesses, it’s usually less complicated to run alongside the fiscal tax year, which is April 6th to April 5th