Which type of accountant is right for you?
Do you need to hire an accountant but you don’t understand all the different types of accountants and how they differ? Your relationship with your accountant is very important. A poor decision could have negative impacts on profitability or the amount of taxes you’ll pay. You need to choose well.
Although I am a chartered accountant myself, I have worked in industry with all type of accountants – chartered accountants, certified accountants, cost and management accountants and certified public accountants. I think that I have a good understanding of the value of each of the qualifications. I have also hired lots of accountants and I didn’t always hire the chartered accountants.
Different Types of Accountants
So what are the main types of accountants found in Ireland
Chartered Accountants (ACA/FCA)
Chartered Accountants are members of the Institute of Chartered Accountants in Ireland. There are about 25,000 members of that institute but they are not all working in Ireland.
The main training route for chartered accountants is to enter a training contract with an accounting firm in practice. The contract allows for time off for study which is a big advantage for the trainee. While working in practice, the trainee usually gets very good exposure to preparing accounts and tax returns for many different types of businesses.
The chartered accounting exams have a broad syllabus so they will also get exposure to other aspects of accounting. After qualification, they can go into any industry where they can get further experience in many different roles.
In recent years, a new training route has been added for people not working in practice. However, to qualify to set up in practice themselves, successful students will have to gain experience in practice after passing their exams.
Certified Accountants (ACCA, FCCA)
Certified Accountants are member of a global organisation that has an Irish Branch.
Students can either work in industry or in practice. The students usually have to do the study and exams in their own time.
You don’t have to be working as an accountant while you are studying and doing the exams. However, once you have passed the exams, you have to have relevant supervised work experience to be recognised as a full member.
The syllabus for the exams is broad and students get a good technical base.
If a successful student wishes to go into practice after qualification, they will have to show that they gained relevant experience working in a practicing firm.
Cost and Management Accountants (CIMA/FCMA)
Cost and Management accountants are members of the Chartered Institute of Cost Accountants.
Cost and Management Accountants specialise in providing accounting support for management.
Students typically work in industry and, like certified accounting trainees, do the study and the exams in their own time.
From my experience working with Cost and Management Accountants, their training tends to put less emphasis on the reporting and tax work than Chartered or Certified Accountants. I feel that they would be stronger on costing and use of accounts for decision making.
Certified Public Accountants
This is a younger body but it’s similar to Certified Accountants in that students can study and do the exams independently of their work.
The CPA institutes sets their own exams.
Again, like Certified, to become a full member the applicant has to have relevant supervised experience. Again, to go into practice the accountant must have relevant practice experience.
Importance of Accounting Qualifications.
Not many people realise this, but there is no restriction in Ireland on using the title accountant. Anyone can call themselves an accountant and can set themselves up in practice as an accountant.
While I have come across some very good unqualified accountants and, while I have also come across some very poor qualified accountants, I think you have a much greater probability of having a good experience if you work with a qualified accountant.
Qualified accountants will have take regular update courses (Continuing Professional Development – CPD) to keep up with changes in tax and legislation so they they maintain their qualification. If they are in practice, their institute will insist on them having professional indemnity.
Type of Accounting Work needed to be done
When choosing an accountant, the key thing is to be clear on what type of work you want them to do for you.
Annual Accountants & Tax Work
If what you need is simply annual accounts and tax returns, then an accountant in practice is likely to be a good fit for you. Most practices tend to focus on this type of work.
Providing accounting support for management
If you are looking for help with managing profitability, preparing costings or projections, and helping with decision making, then you want someone with experience in that area. You should probably be looking for someone who has industry experience. You should be talking to the many accountants now who are offering part-time or outsourced financial controller services.
Raising Funds from investors
If you are looking to bring in investors, then you want someone with that type of experience. They typically refer to themselves as corporate finance specialists. You will be looking for someone who will know the key people interesting in investing in your sector. They should have experience putting together the documentation that an investor will require to help evaluate your proposal.
If you have a business in financial difficulties that may need restructuring, you are likely to be looking for someone who has experience in that area.
As I said already, I have worked with all the different types of accountant and I have hired all the different types of accountants.
While I value a qualification, in my experience, the person is more important than the actual qualification that they hold.
I believe that to find a good accountant you need to look for a number of characteristics.
They should hold a recognised accounting qualification and they should be maintaining their education through a CPD programme.
You want them to have relevant experience. It doesn’t necessary have to be in your industry – sometimes new eyes bring new insights – but it would be better if they have have done similar work for someone else previously.
Interested in your work/business
You want someone who is interested in the type of work that you want done and interested in helping you to succeed.
If you want to understand and improve your profitability, then you don’t want someone who prefers working on annual accounts and tax.
Equally, if you are happy with the performance of your business and all you want done is the annual accounts and tax, then you may not want someone who is more interested in understanding why you are getting the results that you are getting
This is the last quality but, in my opinion, it’s the most important.
You want an accountant who is on your side, who will be anxious to do a good job for you.
You want them to be organised so that they don’t miss deadlines.
Finally, you want them to be proactive so that they give you heads up about what is happening in the business and you don’t want to have to wait until it happens before you and, then, they react to it.
So while I think that using a qualified accountant is important, I am open as to which qualification. I would put much more emphasis on the personal characteristics of the accountant. You need to meet with them and understand their experience, their interests and their approach to the work. To do that properly, you should also talk to other clients of theirs and understand what their experience of working with the accountant has been.
This article has been written from my own experiences. I’d love to hear your thoughts on this topic too.
If you disagree or feel that I missed out on something, feel free to share your thoughts in the comments and feel free to ask if you have any questions.