Recruitment businesses: does your accountant pass these 5 tests?
If your accountant doesn’t have specialist knowledge of the recruitment industry, are you sure you’re getting the best service for your money?
Your accountant should be able to prepare the figures for your agency’s final accounts and HMRC submissions, advise you on how to run your business most effectively for tax and auditing purposes – including recruitment-specific advice – and provide you with up-to-date figures on your business.
If they’re not passing these five tests, it’s worth making the switch to a specialist recruitment accountant:
1. Do they show you your management accounts every month?
For any recruitment business, your management accounts are your best indicator of how the business is performing, what your overheads are, and what you owe HMRC. They enable you to track your income and expenditure accurately. If you’re only getting management accounts quarterly, or even less frequently (let alone if you’re not getting them at all), you don’t have an accurate picture of how your business is performing. That means you’re forced to make key decisions, like hiring or investing in new technology, in the dark.
2. Do they constantly update their record-keeping?
Most accountants let invoices, bank statements and expenses pile up for a month or more before producing their figures. In recruitment, your accountant needs to be updating records as they go, otherwise any issues or mistakes won’t be picked up for a month or more after the transaction has occurred.
3. Can they give you recruitment-specific advice?
If your accountant also looks after your local grocer, hardware shop and pet grooming parlour, you might have trouble getting industry-specific advice out of them. Are they on the ball when it comes to recruitment legislation, contractor/temp revenues and invoice finance? If not, your figures might not be showing your gross profits accurately, and you might be overpaying your contractors.
4. Are they good at tax planning?
With large profits sometimes rolling in very quickly, recruitment is an industry where it’s vital to understand what taxes are due and what might affect them. Your accountant should be making sure you’re on the right VAT scheme and frequency and should be able to explain to you what affects your corporation tax, the best way for you to take profits from the company, and the associated personal tax liabilities. Otherwise, you risk trouble with HMRC or being caught short without enough cash in the business.
5. Can they support you in planning your endgame?
You probably have an idea of what type of recruitment business you want to grow, how you want to do it, and what you want your exit strategy to be. Does your accountant have experience in this area, and can they discuss it with you in an informed way? A lack of advance planning can lead to setbacks or to unnecessary expense when you end up rethinking your company structure down the line.
If any of these rings a bell, get in touch today to discover what a recruitment specific accountancy service can offer you.