Instead of asking who the best accountant is, you should ask what type of accountant my business needs. We broke down which types of accountants work best for which businesses.
How do I choose an accountant?
You’re probably searching “who’s the best accountant in <town>”. The better question is “What type of accountant does my business need?”
Businesses can have brilliant accountants running firms from their back bedrooms, and others have big-city firms with shiny offices, yet still feel underserved.
Because most frustrations with accountants are not caused by bad accountants, they’re caused by a mismatch. The truth is, there are broadly three types of accountants, each suited to a different kind of business.
The Trusted Generalist
This is usually a one-man band, or maybe a very small partnership. One person handles everything for you:
- Accounts
- Vat
- Payroll
- Tax returns
- Bookkeeping
…the lot.
They are often highly personalised, deeply trusted, and become part accountant, part confidant, and often friends. For many small businesses, they are perfect.
If you’re a freelancer, consultant, tradesperson, small retailer or early-stage business, you may not need anything more sophisticated.
And there’s an uncomfortable truth larger firms won’t admit – for many businesses, paying for anything more is unnecessary and poor value.
The downside? There’s rarely specialist knowledge, capacity is limited, and advice tends to focus on reporting the past.
But for simple businesses, they may be exactly what you need.
The Compliance Specialist
This is your “traditional” multi-partner firm. Different specialists handle those aspects above. They are more structured and resilient, and their advice is technically deeper than that of a small generalist practice.
If your business is growing, becoming more complex, employing staff, taking on debt, or developing more sophisticated tax needs, they are often the next natural step.
But here’s where a mismatch might occur. Many business owners expect strategic advice from compliance firms that were never designed to provide it, because most compliance firms are built to answer “Have you reported everything correctly?”, not “Where do you want the business to be in three years’ time?”
That doesn’t make them bad firms at all – it simply makes them different.
The Advisory Firm
Advisory firms do all the compliance work too, but the relationship is different. The conversations are less about deadlines and more about:
- Profitability
- Cash flow
- Forecasting
- Systems
- Decision making
- Growth
- Business value
- Succession
…the future.
You meet regularly. The accountant becomes more commercially involved. Technology and reporting tend to play a bigger role.
If you’re trying to scale, build systems, prepare for sale or succession, get better clarity over the numbers that drive your decisions, like collaborating on projects with your accountant, and want an advisor that will drive things forward with you, an Advisory Accountant can be transformational.
But let’s be brutally honest about something. Advisory firms are not automatically better.
They are usually more expensive than traditional firms. They require more time from the business owner, and many business owners just do not need this level of support. Some business owners just want their taxes and accounts handled properly so they can get on with running the business.
The key is not choosing the best accountant. It’s choosing the right type of accountant for your business, and you, today.