A third (33%) advise others that they should hire an accountant; but with accountants able to practice without a qualification, how do small businesses know they have found a qualified, trustworthy accountant or one that is unqualified and unregulated?

We know that SMEs expect a professional, honest service when they engage accountants and tax advisory agents. But that’s not always what all business owners get. Half (51%) of small businesses have had to hire a qualified accountant to correct mistakes made by an unqualified accountant.

Most are shocked when they hear there’s no method of recourse for these rogue accountants; particularly when the consequences for small businesses can be dire. Incorrect tax guidance can lead to significant HMRC fines and even result in prison time. For some SMEs, it’s simply not viable to correct the mistakes – some may not be able to afford to pay another accountant to essentially repeat the job again or they may not have the cash reserves to pay more VAT or tax which hasn’t been accounted for in the cash flow. It can, in extreme cases, spell the end of their business.

For over a decade, we’ve campaigned for much-needed protections for small businesses. In March we landed a historic victory when, for the first time ever, the UK government publicly committed to seriously consider mandatory membership of a recognised professional body for tax practitioners, in an announcement made as part of the Spring Statement.

This is an incredibly positive step forward given that currently a third of accountants and other professionals providing tax advice remain unregistered with a professional body with regulatory abilities such as AAT. It’s really important that small business owners are fully aware of their accountant’s credentials and confident with the accountancy and tax advisory services they are receiving.

Many rely on word of mouth or recommendations from other business owner contacts to find an accountant. Which is understandable; if someone you know and trust suggests someone, the chances are they are going to be good, right? Not necessarily. There are so many factors at play here, the main one being: has your contact asked the accountant what their qualifications are? Chances are they won’t have. Even if they have, they probably don’t really know what the qualifications mean or which bodies and associations they should be a part of.

Just because a business has had a good experience with an accountant, doesn’t mean another is going to as well. Different business models present different issues, lack of continued learning and development throughout their career may result in the accountant coming up short in knowledge areas, different company structures result in different tax arrangements; the list goes on.

A fail-safe way to find a qualified and professional accountant is through online directories, such as our AAT Licensed Member Directory, which signposts consumers to all the accountants who are practising AAT members. These online directories are free to use and enable business owners to search according to the accounting service they require, the location or the name of the accountant. This is an example of how, as a sector, we can work to ensure small businesses are protected from rogue accountancy.

Accessing sound finance expertise isn’t only for when a small business is up and running, it’s also an integral part of the pre-launch phase as well. Accountants can help a business register with HMRC, set up the cashflow, apply for loans and grants; all essential components of getting ready to launch.

Total employment across the SME sector is 16.7 million, 61% of the total UK employment. Without good financial planning, SMEs can’t manage their cashflow effectively, pay staff, expand and grow or invest in product development. Partnering with accountants that will help them flourish will not only drive them forward, but also ensure they are able to continue to provide employment opportunities and economic growth to the UK.