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The advice accountants may be able to give ranges from the basic services, such as book-keeping, to the more sophisticated, such as tax planning or raising funds. Not every accountant will offer every sort of advice. For example, a big firm of accountants is unlikely to undertake weekly book-keeping functions; an accountant working alone may not have the expertise to help with raising funds.

Some of the areas of advice include:

  • ? accounts: doing the book-keeping, setting up accounting systems, advising on computerized accounting packages, auditing for a limited company
  • ? finance: managing cash, helping to raise finance and to negotiate with the bank manager, raising venture capital
  • ? business purchase: investigating possible acquisitions, analyzing franchise opportunities, negotiating purchase prices
  • ? tax: preparing income tax, corporation tax and VAT returns, carrying out PAYE and national insurance requirements for employers, personal and business tax planning, advice on raising funds under the Enterprise Investment Scheme
  • ? general business advice: preparing business plans, budgets, forecasts and advising on the form of your business, that is, whether you should be a sole trader, in partnership or form a limited company
  • ? preparation of prospectus: to raise money from the public.

Quite a lot of accountants, particularly the large firms, also have management consultancy divisions, which can advise on the setting up of internal systems, computerization and so on.

HOW TO CHOOSE

The term ‘accountant’ does not necessarily mean that the person so described has any formal accountancy qualification. If you want to employ someone who is a member of a recognized body, you should look out to see if there are letters after the name. The main organizations which will be of interest to you as a small business are:

? The Institute of Chartered Accountants in England and Wales and The Institute of Chartered Accountants in Ireland, whose members put ACA or FCA after their name, and The Institute of Chartered Accountants of Scotland, whose members put CA after their names

? Association of Chartered Certified Accountants, whose members put ACCA or FCCA after their name.

What you gain by using a member of one of these bodies is the knowledge that a required course of training has been followed and certain exams passed. In addition, if you want to appoint an auditor, you must appoint someone who is a member of one of these bodies, which have been recognized by the DTI as auditing bodies.

If you need to find someone who will help with your book-keeping and preparation of your tax returns, and your business is fairly small-scale, employing fully qualified accountants may be the equivalent of cracking a nut with a sledgehammer. You may be able to find someone else quite competent to carry out the limited range of jobs you have in mind, but obviously at a much cheaper rate.

The only satisfactory way of choosing an accountant is by recommendation and taking up references. Ask your bank manager. Colleagues and friends who use the services of accountants are also possible sources of recommendation. References should always be taken up.

There is a case to be made for opting for one of the bigger firms of accountants, if you want to raise money from outside organizations or the public. Investors may look at the proposal with more confidence if your financial advisers are will known, rather than from a small firm of accountants (however good at their job).

As with any business negotiation there should be a discussion about the scope of the work to be done and clear agreement on what this is and what it will cost. Really you must satisfy yourself, before any work is begun, that the accountant knows what you want and is capable of doing it.

If it is management consultancy that you are interested in, find out if the consultancy is a member of the Institute of Management Consultants or the Institute of Business Advisers. An important point to check is that the consultant has experience of the problems of small businesses.

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