top of page
  • Writer's pictureEmily Inman

The different types of Accountants and how to choose the best one for your business

It might seem that Accountants are all pretty similar and offer the same type of services, however within the industry there are many clear differences which I will outline briefly for you here, and will hopefully help you to choose the best accountant for your business.

I have grouped them into the broad categories, but many accountants may span across different types.

Traditional accountants - This is probably the type that you know the most, as this has been the most predominant type of accountant up until the last 10 years.

The traditional accountant will provide you with the traditional service with which you are probably most familiar, they will submit payroll, VAT returns, end of year accounts, company tax return, and personal tax returns. This is usually the extent of their involvement in your business. Typically they perform these services on their own systems, but it's becoming more likely they would provide you with some cloud accountancy software these days, but not always. If you don't really need much general support from your accountant, nor do you need software or help in managing the finances of your business, but you want a good quality job and someone to speak to should the need arise, then this would be good choice for your business.

Low cost accountant - a low cost accounting firm has been specifically set up to process high volumes of standardised accounting work as cheaply as possible. They often use a conveyor belt system where each part of the job is manned by the same person and the job moves through the people for each job until it's complete. These jobs are often completed by financial administrators or junior accountants. They will often use cloud software, and will require that you conform to their software and processes so that they can fit you into their workflow processes. These accountants are great if you have really simple and straightforward accounts, and you want a low cost fast turnaround solution, ideal for contractors. However, should you need business / tax support outside of the norm it might prove more difficult, and you may not get the support you need.

Digital accountants - the modern breed of accountants. These accountants offer all of your traditional accountancy services, but they also make sure you have decent cloud accounting software, and can offer advice on your ideal "app stack" to make sure you're as automated as possible. As they have the advantage of faster accounting through the latest tech, they also offer value added services, predominantly management accounting. Helping you to use your numbers to make better decisions. Usually (not always) slightly more expensive, but can add a lot more support and value to your business.

Business advisory accountants - also can be know as virtual Finance Directors. Great for when you need ongoing financial support but aren't yet big enough for a full time FD. They will help you with the strategy of your business from a financial perspective, e.g. business planning, cash flow management, KIP development, raising financing etc. some offer tax planning services too.

Industry niche accountants - This is usually a combination of digital accountants and business advisory but who have chosen to specialise in a particular industry. A huge array of apps into the marketplace means that it's difficult for accountants to keep up with all of them, to know the pros and cons and to have a details knowledge of them all. This is starting to result in industry specific accountants. For example, we specialise in the construction industry. It allows us to add real value to our construction clients, as our services are designed particularly for the industry and have a strong project margin and cash flow focus.

Tax Specialists - Quite often tax specialists don't do general accountancy work, but will have their own tax specialism, e.g. VAT, R&D tax credits, Inheritance, Property, Tax investigations etc etc

Size matters!?

A final factor to consider is the size of accountancy firm. I recommend considering your business size with the size of the accountancy firm. If you are very large you will need a lot of resource and might be better supported with a bigger firm with more capacity, however, with flexible work forces and better technology this is becoming less and less necessary. If however, you are a small startup, working with a startup accountant might provide you with a great service at a lower price.

Most Importantly !!!

Don't forget the basics, and to check that they have the relevant qualifications, (ACCA, ICAEW or CIMA), they also need a current practicing license (these are issued annually) and current professional indemnity insurance. The industry is not regulated and anyone can set up shop and trade as an "accountant".

Emily Inman FCCA

148 views1 comment


bottom of page