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Questions to ask an accountant when starting your own business
Every year, thousands of new businesses are registered across the island of Ireland. In 2017 alone, the number of VAT and/or PAYE registered businesses in Northern Ireland rose by an estimated 1,560 while CRO statistics show that 22,304 new companies were incorporated in the Republic of Ireland, up more than 6 percent on the previous year.
Behind every new business is an entrepreneur whose vision drives the venture forward. Typically these owner-managers are high-energy individuals who are hands-on in every aspect of the business at the early stage. Their skills and knowledge are vital but unless they have previous business experience, they can make basic mistakes which often prove time-consuming and expensive to fix in the longer term.
Don’t try to do everything yourself
A common issue we come across, is owners trying to save money by doing everything themselves. As the business gets going, demands on the owner increase. This puts pressure on the owner and can lead to problems such as invoices not being issued/collected on time, cash running out, deadlines being missed, and so on.
Many of these problems can be avoided if proper structures and processes are implemented from the outset. So, if you are planning to start a business, it makes sense to get professional advice at the earliest possible stage.
When looking for an accountant and business advisor, it is a good idea to seek recommendations from other business owners in your area and to choose someone with appropriate experience in your sector.
When starting up a new business, the earlier you get professional advice, the better, says Michael Farrell.
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Questions to ask your accountant
Once you have selected an accountant, here are some of the key questions to ask:
- Is my business viable? Ask your accountant for honest feedback on your business idea and for their insights into how similar businesses typically perform.
- What structure should I choose? Your accountant will explain the pros and cons of various business structures and advise on the best structure for your business in the short, medium and longer term. For example, it sometimes makes sense to initially set up as a sole trader and delay incorporation until your business achieves certain turnover or growth. Your accountant will also help you to file the required documents so as to ensure that your business is correctly set up from the outset.
- How can I raise finance for my business? Banks are often the first port of call when business owners need to raise finance. However, there are other options that should also be considered including grants and alternative funding sources. Your accountant will help you to prepare a robust business plan incorporating cashflow projections to support your funding applications.
- What records must I keep? Every business should maintain proper financial records, which is topical at the moment given the planning for Making Tax Digital. It is also important to keep your business and personal finances separate and to implement correct processes for record keeping. Technology makes this much easier today than it was in the past. Many small businesses use real time accounting services to save time and help them comply with all the relevant rules and regulations.
- How should I price my product/services? In order to help the continued sustainability of your business, your accountant can help you to work out what costs should be factored in to your pricing strategy and will advise you on how you can improve your competitiveness.
- Apart from accounting and tax services, what other services do you provide that could help my business? Firms like FPM provide a broad spectrum of services that you may need at different stages of your business development. These include Brexit advisory services for which funding is available through InterTradeIreland. Our business advisory team can tell you more about these services. FPM also organises regular seminars and networking events which provide an opportunity for you to connect with other business owners.
If you are starting a business and would like more information…
