This article will discuss the difference between bookkeepers, chartered accountants and small business accountants and how to recognise when you need one.

It will also suggest nine questions you should ask them when you’re interviewing them.

Do you want to run your business properly but small business accounting scares the living daylights out of you?  You’re not alone.

Do you know when it’s the right time to engage one?  Will you need a bookkeeper or chartered accountant? Do you know how to find one?

Starting your own business with a do-it-yourself (DIY) concept is not unusual.  They’re virtually synonymous! When it comes to accounting, DIY options such as Xero, MYOB and Quickbooks makes it possible.  

However, a word of caution.  If you are doing either of the following, you probably need to enlist some expert help.

Number one, if you are secretly wondering if you’re even doing this right at all, that’s a red flag, and number two, if you’re not doing it at all because well, you don’t know what to do and it’s overwhelming that’s a huge red flag and it’s time to let an expert takeover.

So, how do you know when it’s time to engage a bookkeeper, accountant or chartered accountant?  Why are they different? A brief definition will help explain. A bookkeeper or accountant maintains your accounting records, such as bank reconciliations, cash books, invoices, etc.  A chartered accountant is more qualified and focuses on more advanced accounting such as tax, financial statements, budgeting and forecasting.

But it’s also important that you know that accountants, like doctors and solicitors, often specialise in different areas.  For example, if I break my arm, I’m not going to visit a skin specialist! You just need to find the right person for your specific needs.    

Quite often, it’s useful to engage both.  Choose a bookkeeper to help process your regular monthly bank transactions, etc.  Their fees are generally much cheaper. And if you’re happy to outsource your bookkeeping consider using a virtual accountant, who offer some very competitive rates – often fifty percent or more.  

But, like the example I used, engage a specialist when it comes to tax returns, tax planning, financial statements, etc.  Chartered accountants handle this level of complexity. Would you want an unqualified bookkeeper looking after your tax affairs?  

Now, you’re ready to do your homework and choose the right person for your needs.  Start with the internet. Type in “small business accountant” and your city and review the results.    

Select a few and review their websites.  Does their website look professional? Do you sense they have good experience?  Short-list three that you’re potentially interested in talking with and make appointments with them.  

Interview them on the ‘phone or go to see them to establish whether they could fit what you’re looking for.  Don’t panic that you won’t know everything. Remember that you’re not the expert on small business accounting, which is why you’re hiring them!  Their job is to convince you that they’re the experts!

If you don’t know what to ask them during the interview, don’t worry.  Here are ten questions I recommend you ask them. Again, remember that it’s perfectly acceptable that you don’t know everything.

#1: What areas can you help me and my business with?  This gives them the opportunity to explain what they can do.  They’ll probably going to ask you a few questions so they can better understand your business and needs.  

#2: How many other clients do you have who are [insert your trade or profession]?.

#3:  How easy is it to contact you and who will you assign me?  You’ll want to know if they’ll be available when you have questions and need more detailed explanations.  The person you speak with during your initial conversation may not be the one you end up working with. Make sure you’re happy with that person before you agree.  

#4:  How much do you charge?  Are there any additional fees?  

#5: How will you help me reduce my tax bill?  

#6: Based on your experience, how shall I structure my business?

#7: What records do I need to keep and how do you recommend I organise them?

#8: What happens if I’m audited?  Will you help me?

#9:  Is there anything else I should know?  This is an awesome open-ended and final question.  It allows them to share any final thoughts and ideas on how you can run your business and convince you why they meet your needs.

You’ll learn a lot about yourself and your business with these ten questions.  You’ll also have the criteria to help you select the right person for you.

I hope you’ve enjoyed this article.  If you did, please leave your comments below, like the article, or even better share it with family and friends who may also benefit from it.  Don’t forget to subscribe to our newsletter to receive more useful tips from your friendly small business accountant.