Employing an accountant when you enter the pub trade or changing accountants can be a difficult decision to make. Choosing a specialist pub trade accountant can make a huge difference in the success of your business.
Four common factors might affect your decision:
- Ensuring your choice of a new accountant is the right one.
- Reducing the element of risk associated with the decision you have to make.
- Your ability to create a strong and lasting relationship.
- Having an idea of how accountants charge for their services.
I can’t guarantee the success of the relationship, but this guide will give you the best possible chance of achieving the goals and the objectives of your business.
Growing any business can be fraught with difficulties and growing a pub business is no exception, so when it comes to choosing your accountant you need to make sure you ask the right questions when choosing your accountant:
Do they specialise in the pub trade? Do they have other pub clients?
Do they spend most of their time with people like you and your type of pub? Have they worked for publican’s with similar sized businesses? (If they haven’t worked with similar companies – that maybe a negative factor). To find an accountant who specialises in pubs head on over to the Association of Licensed Trade Accountants to find one in your area.
Do they offer services that help you grow your business?
The pub trade is a vibrant and fast changing industry and with all the challenges facing pub owners you need to choose an accountant that is aware of those challenges and up to date with developments in the industry. Your accountant shouldn’t just be a “bean counter” who does not understand your business growth needs; they need to able to help you maximise your business’ profitability.
How proactive are they?
An accountant’s commitment to their relationship with their clients is crucial, especially if you are seeking business development advice. Some accountants will work quite happily with the minimal input from you, others will want to work with you to ensure your success. The latter, in my opinion is the more preferable, as long as you don’t end up doing all the work. A simple way to ascertain this is to ask what meetings your prospective accountant will plan to have with you on a monthly/quarterly/annual basis.
How do they run their accounting and bookkeeping services?
Ask the accountant to run through ‘how’ they run these services. Some accountants will make you do all of the work and want things presented in a certain way before they’ll even touch your books and receipts. Not only is this time consuming but it can also be stressful and not what you need or want. Ask to see specimen reports, examples of the forms you need to fill in for them. The relationship between accountant and client is just like any business relationship and your mantra should be “How do I benefit from this relationship?”
How do they operate their payroll service?
With the introduction of Real Time Information for PAYE and the upcoming Pension reforms, it is important now, more than ever, any accountant you choose minimises the input you need to make to this vital business task. You need to be very clear on what is expected from you before you sign up with an accountant. For preference what you really need is to be able to simply post, email or fax your employees’ hours to your accountant and let the accountant do the rest.
What is included and what isn’t included in their services?
As with any goods or services your business procures you need to be crystal clear on what’s included and what isn’t. You should get a clear statement from your prospective accountant of exactly what is included in the fee package they propose and a definitive statement from them that there are no “hidden extras”.
Do they have the resources to handle your business?
This is a very important question. Whilst I doubt anyone would answer “no” to this question, there is no harm in asking so they get the opportunity to explain to you what resources are available to look after your business. Asking how many staff they employ, how many clients they have and how many clients do they think they can handle with their existing resources should inform your decision.
Remember there are “pinch points” in the financial year relating to VAT, Tax, PAYE, Companies House and you don’t want to be at the end of the queue when these happen. There are times when you will need urgent advice regarding your business, will they be able to provide you with the service you need, when you need it?
What are their fees (do they charge by the hour, day, etc)?
I would advice against an open-ended fee structure as this can often lead to large, unforeseen bills, if possible you should agree the fees before they start working for you. You’ll know exactly what you are going to be charged and can plan accordingly. These are some of the common fee structures I have come across:
- Quoted in advance (the most preferable)
- Pay as you go, with itemised bills, for instance a monthly bill for payroll, quarterly bill for Machine Game Duty or VAT etc
- No advance quote with an itemised bill at the end of the year
- Open ended standing order where the accountant sends periodic bills, often with no reference to the Standing Order or the bill
This is what a leading accounting guru has to say (to other accountants) on how to “premiumise” fees to clients…
What do they think sets them apart from their competitors? What do they offer that other accountants can’t?
Just as you might ask a prospective employee these questions, so it is with choosing an accountant and is a good way to separate the “wheat from the chaff.” Listen carefully to their answers, ask for examples of the service they supply for other pubs and don’t be fobbed of with generic answers about offering value, quality and service over and above their competitors.
Do they charge for everything they do?
Many accountants charge for every second they dedicate to you and your business, those that offer some free advice or a free helpline for example show a willingness to put your interests above their own, which, is precisely the type of accountant you want.
Do they guarantee results?
You might not think that accountants offer guarantees, however, many do and if a prospective accountant doesn’t, then you should be asking why not? As with any supplier to your business, your accountant should guarantee their work either by agreeing to meet certain parameters agreed by you and them and offering appropriate compensation if they fail to “deliver the goods”. In any event they will belong to a professional body that oversees their conduct and allows you an avenue of redress, and, I’ve yet to meet the accountant that doesn’t carry hefty professional indemnity insurance in case things do go wrong.
What proof have they got to back up their claims? Will they provide references?
Testimonials, case studies and letters of appreciation, will give you a very clear indication of the type of accountant you’re dealing with. Just like a job interviewee, if the person you meet doesn’t have any of these items with them, I think it’s reasonable to draw one of two conclusions:
- They don’t have any, which, might suggest that they aren’t as good as they say they are
- They have them but they haven’t brought any with them, which, might suggest a lack of preparation
Those that can show you testimonials etc are more likely to be professional, highly organised and usually good accountants. Personal recommendation can play its part in your decision making, as others in the pub trade are usually more than willing to recommend or steer you away from certain accountants.
My pubco / brewery landlord insists I use their “recommended” accountant.
Many pubcos and pub-owning brewery landlords insist you use an “approved” or “recommended” accountant. I believe this is a genuine attempt to make sure you have a competent accountant on board to prepares your accounts and carry out book-keeping duties. However, I also believe, you should not be stopped from taking on a tenancy (as some make this proviso a condition of granting a tenancy) if you appoint a competent accountant, especially if their fees are more advantageous to you than those of a nominated accountant. If you are confronted with this choice make it a “deal breaker” as the pubco needs you to take on the tenancy.
Making the choice …
Clearly the accountant who closely matches your pre-prepared list on what you’re looking for in an accountant is the best one to choose.
The fees accountants charge will vary greatly. In my opinion the way to consider fees is to look at the value you will receive from the accountant. Price is a factor in anything you buy as is “value for money”. List the benefits each accountant offers you and compare their fees, this will give you a good indication of the value that you should expect to receive.
Accountants study long and hard to become qualified, just as your solicitor will have done, both of these professions charge accordingly so don’t be surprised at the level of their fees. If they look after your business in terms of staying within the law and minimising your tax or exposure to penalties then those fees will be well worth it.