Choosing your first accountant

Four checks before you sign

1. Professional body membership

Ask which body the accountant belongs to, for example ICAEW, ACCA, ICAS, CIMA, AAT or ICB. Then check their name on that body's own directory. ICAEW's is called Find a Chartered Accountant.¹ Members must follow their body's rules. ACCA's guidance, for example, says clients should be told they can approach ACCA if a dispute with the firm cannot be resolved.⁴

2. Money laundering supervision

A business offering accountancy services to clients, such as bookkeeping, preparing accounts or help with tax returns, must generally be supervised under the money laundering regulations. That is either by a professional body (GOV.UK lists ICAEW, ACCA, AAT, ICB and others) or by HMRC.² If the firm says HMRC supervises it, you can look it up on HMRC's Supervised Business Register. HMRC says being on the register is not an endorsement.³ Ask the firm who supervises it. In our view, a firm that cannot tell you is a reason not to go ahead.

3. An engagement letter

An engagement letter sets out the work the firm will do and the fee. ACCA's guidance says letters of engagement are mandatory for its members, and should set out the work to be performed and the basis on which fees are charged.⁴ Read it before you sign. Look for:

• which services are included, and which are not;
• what you have to provide, and by when;
• any notice period if you want to leave;
• who to contact if you are unhappy.

4. The fee in writing

Under the ICAEW Code of Ethics, a member must give fee quotes or the basis of fees in writing, before the work starts or as soon as possible after. If a firm sets a fixed fee, ICAEW says it must be clear about what work the fee covers.⁵ If the price is monthly, ask whether the monthly payments cover everything or only spread the cost.

What to ask

1. Who will do my work, and who do I contact day to day?
2. What exactly does the fee cover, and what would cost extra?
3. Which software will I use, and who pays for it?
4. How will you remind me about deadlines and what you need from me?
5. Will you deal with HMRC for me?
6. Have you worked with businesses like mine?

For a longer list, grouped by topic, see Questions to ask a new accountant.

Comparing quotes

Two quotes for "accounts and tax" can cover different work. Put them side by side against the same list:

Questions to answer for each quote

Item	What to check
Annual accounts and tax return	Included, and for which year?
Bookkeeping	Do they do it, or do you?
Payroll	Included, and for how many people?
VAT returns	Included, and how often?
Your own tax return (if you are a director)	Included or separate?
Software	Included in the fee, or paid by you?
Advice and phone calls	Included, limited, or charged by the hour?
HMRC letters and enquiries	Included or extra?

A lower quote is not a warning sign on its own. ACCA's guidance says a lower fee is not in itself unethical, but the engagement letter should make clear which services the fee covers.⁴ For how firms set prices, see How accountancy fees work.

What we do and do not check

We do not check whether an accountant is competent, qualified or suitable for your business. The checks above are ones you can make yourself. If you use our form, you see the result before we ask for any contact details.