What to look for in a contractor accountant

As a contractor, there are a few different ways you can handle your accounts. The first option is to do it yourself, of course, and many do choose this when just starting out, or if their accounts are pretty straightforward (sole trader working on a cash in, cash out basis, for instance), because it’s ultimately free. However, this can be time-consuming and, as your business grows, can become increasingly complicated, increasing the chances of mistakes. For this reason, others opt for a little help.

Many pay for specialised software with a monthly fee that handles their invoicing, bookkeeping and Self-Assessment on their behalf, often through connected apps on phones, tablets and computers.

However, these services can be impersonal and some feel their one-size-fits-all approach doesn’t work for everyone. This is why many feel hiring a dedicated contractor accountant is the best as, that way, you’re letting an expert take care of things and they, in turn, can get to know you and your business to offer a truly personalised service.

What accountancy services do I need as a contractor?

Which accountancy services you need will largely depend on the needs of your particular business. Some will need just the bare bones, while others will need a full roster of services. However, as a general rule of thumb, most contractors will want:

• Personal support and advice, either face-to-face or remotely
• Annual accounts, including corporation tax and dividend calculations for limited company contractors
• Income Tax Self-Assessment
• VAT returns, where applicable
• HMRC enquiries and correspondence
• IR35 support

Bookkeeping is not often offered as standard by contractor accountants as many choose to do this themselves or employ their partner to handle it for them. However, some accountants do offer it, or else offer regular bookkeeping reviews to ensure your accounts are in order throughout the year.

Of course, there are other aspects to consider as well to make sure you’re hiring the right accountant for you:

• Do they offer you your own dedicated, named accountant?
• Are their business hours compatible with your own?
• Can you meet them in person or only online?
• Do you want an accountant from a small or large firm?
• How much do they charge?

This last point is important. You don’t want to get stung by any unexpected bills and a good accountant should always be up front about costs. Fortunately, many contractor accountants now offer fixed fee packages so you simply need to find the best package and accountant for your needs.

How to find the right contractor accountant for me

Of course, you may feel that’s easier said than done. After all, there are a lot of accountants and accountancy firms out there – where do you even begin? Well, the first thing to do is research, research, and more research. This is probably less arduous than you think.

The first thing to do is ask around. You have a whole network of contractors at your disposal, so find out who people you trust use and if they’re happy with them. From this, you can probably draw up a bit of a list of names to begin with. Good old Google is also at your disposal here, just be sure to search for contractor accountants rather than just basic accountancy services.

You should also make use of search services from professional organisations so you know that you’re contacting a reputable accountancy firm. The Freelance & Contractor Services Association (FCSA) specifically represents contractor accountants so its search function is very useful.

Other accreditation bodies you can search include the Institute of Financial Accountants (IFA), the Association of Chartered Certified Accountants (ACCA), the Association of Accounting Technicians (AAT), the Institute of Chartered Accountants in England and Wales (ICAEW) and Institute of Chartered Accountants of Scotland (ICAS).

You can use these bodies to either find accountancy services yourself, or to cross-reference any that have been recommended to you. Ultimately, you’re trusting your accountant to do their job well and keep you away from any problems, so you should put in the research time to find someone you feel comfortable with.

Hiring a contractor accountant

Hiring an accountant is almost always a good idea for contractors. A good accountant will ease pressures on your time, give you peace of mind, and minimise financial risk by dramatically reducing the chance of mistakes or misunderstandings.

They will also be able to give you solid, up to date advice on financial matters such as IR35, pensions, and business insurance (we can help with that if they advise you to make changes to your existing cover) to ensure you’re protecting yourself and your business, now and in the future.

So, take the time, do your research, and you’ll hopefully find a great working relationship that will last a long time and will maximise your earning potential.