I decided to gather this information from our own experiences and the experiences relayed to us by our clients. It is opinion based. I hope it helps someone.

Picking an accountant is not a decision to be taken lightly. Once you are involved with an accountant, you will find it is easier to change religions than to change your accountant. So try to get it right first time.

Tip 1: Smaller business – smaller accounting firm.
In general, a large accounting firm is likely to keep its most senior people for its clients with the highest turnover. Smaller business accounts will most likely be pulled together by junior staff. Is this what you want?

On the other hand, if you are very au fait pulling together a set of accounts, and just need someone for tax advice and final filings, it might suit you to have your accounts signed off by a well-known accounting firm.

Tip 2: Avoid the ‘Leave it all to us’ syndrome
As a business owner the buck stops with you. It is up to you to ensure that you are keeping compliant with all the different types of tax filings. If you are relying on your accountants to do that, then you need to understand what you are relying on them to do. It can be very tempting to accept someone saying “Don’t you worry about a thing, we will take care of that, you go on about your business and leave everything to us”  . But think of it this way, would you hire an employee and say – “I’m going to pay you every week to do something for me, I don’t know what that is, but I am sure you will do your best.”  If the Revenue comes asking questions, you are ultimately responsible for the answers. “I thought my accountant was taking care of it” doesn’t stand up as a defence.

Tip 3: Learn something first
You are an entrepreneur. This means you are not stupid. Get the Revenue leaflet IT48 http://www.revenue.ie/leaflets/it48.pdf , read it and understand it. This will bring you a long way to helping you make your decision on an accountant. If you find you don’t get it, it is most likely because you don’t want to. Get over it. Read it again, accept the bad news.

Tip 4: Decide what services you want from an accountant
Now that you know what’s involved in the accounting/bookkeeping side of your business, decide what you are going to do yourself and what you want your accountant to do. I have divided it up into several distinct functions, examine each and decide what you can take care of yourself, and what you would like to rely on your accountant to take care of for you.

 A. Bookkeeping Services
 This means that you will give them all you paperwork ie, Purchase Invoices, sales information (invoices, cashbook, till rolls, etc.), cheque books, lodgement books, bank statements, and credit card statements. You are leaving it up to them to add them up for you and pull them into a set of accounts for filing.

Note: There are certain elements of bookkeeping that you cannot practically rely on your accountant for: Sending Invoices and Customer Statements out, Keeping track of what you owe individual suppliers,
 
 B. Filing of Vat Returns
 This means you are relying on them, based on the information you have supplied them above, to file your VAT3 with the Revenue every two months, and to prepare your annual VAT return of trading details once a year.

 C. PAYE/PRSI Services
 This means you will provide them with information on what you cheques you wrote or cash you paid to your employees, and they will figure out what you have to pay each month in tax and PRSI to the Revenue on behalf of those employees. They will file this with a P30. At the end of the year, they will do P60’s for each of your employees and file the year end form, a P35. Throughout the year they will issue P45’s to your employees that leave.

 D. Monthly Business Review
 This is an extremely important factor. Okay. If you are getting your accountant to take care of all of your bookkeeping, it means that you have very little information yourself about your business financial situation. Therefore, if you are in this situation, arrange from the start to have monthly meeting with your accountant to look at and explain your figures to date to you. In English. There is another guide available to help you decipher the terms your accountant might use.

 E. Tax Planning
 This is where your accountant comes into his/her own. They can advise you on pensions to reduce your income tax, how to handle the big purchases, best way to handle expenses and mileage, when if ever to switch from sole trader to limited company and many other ways to manage tax effectively.

 F. Year End Items
 Income tax filing for sole traders, or Director’s returns and companies office filings for Limited Companies.

Our advice on what do yourself is A,B and C above. If you do A, B and C, then you will be able to do D yourself, cause you have the information. However, if you hand over all of A,B and C to an accountant, then realistically you will need to arrange a monthly meeting with them to do D, cause they will have the information, not you. E and F is where you get the best value for money from an accountant’s office.

Tip 5: Find someone you can talk to.
Make sure your accountant can speak English when asked. If you are confused by anything they are saying, as them to explain again. If you walk out of their office still confused, don’t go back. Find someone else. If you feel they are talking down to you, find somebody else.

Tip 6: Find out how they keep themselves up to date.
Are they technology minded? Do they regularly attend tax briefings? Are they willing to work with your software choice or do they insist that you conform to their system?

Tip 7: Find out if they have other clients similar to yourselves.
If they are dealing with your size of business and type of industry already, then they are likely to know the ins and outs of your businesses.

Finally, bring this schedule of fees template with you when discussing price.

Hope this helps!

Edit 5 September 2008:

an accountant friend of mine, Louise Carey from www.taxconsultant.ie had this very important point to add:

“Top of the list for picking an Accountant is that they are qualified.  People call themselves accountants and open up but have no idea of accountancy.  Yet the buck stops with the person themselves, they are the one with the major problems, tax interest and penalties, company strike off etc at the end of the day.  Qualified accountants are checked by their monitoring body, nobody checks the unqualified, they have no insurance and if you bring them to court their defence is that they are not Accountants making the client looking like a jackass for hiring them in the first place.  Believe me I witnessed it with my own eyes.”

I asked Louise what to ask your accountant to check their qualifications. She says, “Ask him if they are qualified and with what body.  There are only three bodies, ACCA, which is the Chartered Certified Association which is my one, ICAI the Institute ofChartered Accounts and IPA the Institute of Public Accountants.  You can also double check by telephoning the organisation. “

thanks Louise for that, an important point that I totally missed!

Edit September 8th:

Another accountant and IBW member, Tracey Glacken from www.bkrm.ie pointed out that the Institute of Certified Public Accountants (CPA) is also a legitimate certifying body. That reminded me of these guys: (enjoy, this is funny)