Due diligence checklist
This 20-point checklist should let you assess any potential accountancy partner for fit with your business.
In this checklist we have provided:
  • The question to ask
  • Why ask it
  • What to look for
We have tried to make this list as impartial and general as possible because we are equally keen to ensure we are a good fit for your business. Anything less and we would open ourselves up to not being able to meet (and exceed) expectations.
We are proud of the service level we are able to provide, measured in how much time and stress we can save ecommerce business.
As such, on the list you will find there are other accountancies who may perform better than us against certain criteria, e.g. we are not the cheapest and only offer one high service, and as such are unlikely to be a good fit for a business doing £20k revenue per year.

Is the accountancy a chartered practice?

Appointing a chartered accountant means your accountant is regulated by a professional body, is bound by ethical standards, must have certain policies in place, including professional indemnity insurance, as well as meaning they have undertaken additional training.
We are a chartered practice, regulated by the ACCA.

How many accountants are there?

Be careful of one-person accountancies. Circumstances change, and if your accountant decides to become a salsa teacher, you may end up in the lurch.
We are currently an 12-person practice.

Do they outsource their bookkeeping or accounts prep ?

Many accountancies outsource both accounting and bookkeeping work to external, often overseas agencies. This is rarely beneficial as you will no longer have contact with the person actually looking at your books, and may not be expert or focused on UK tax law or ecommerce.
We do not outsource any aspect of our accounting or bookkeeping.

Are they online?

Do they deliver the service online or do you need to go in-person? This is a matter of preference (and Covid restrictions).
We are predominantly online in our delivery, but you can also have a cup of coffee at our Hoxton, London offices.

How do they communicate with you? Response times?

How do you like to work and is it compatible? Are they email, phone, or video calling only? And what are average response times to standard queries? If they are not experienced in ecommerce factor in time for researching answers to your questions.
Most communication is via email, and for longer or more involved topics we may chat on the phone or a video call. We draw on a large and highly ecommerce relevant knowledge bank built up over the years and as such can typically give a complete answer within 1-3 working days.

Will you have one point of contact or multiple?

Some accountancies assign an individual, some have a team based approach where the full team might handle your responses interchangeably, some provide an account manager as main point of contact, and some are a one-person band.
Having one point of contact is generally better for getting to know your business, but team based approaches are sometimes better for response times.
We assign you one of our accountants when you come onboard and this will be your main point of contact: the person who handles your tax filings, provides ad-hoc advice, and gets to know your business. If we are handling your bookkeeping, you will also have a dedicated bookkeeper .

How do they manage working with you?

Look for a practice that uses workflow management software. There should be a robust process in place to ensure deadlines are monitored and this should be owned by the accountant. If not in place, expect lengthy email exchanges or lots of different chains for different workstreams.
We use a software called Karbon to manage our workflow. This lets us define schedules for work so no deadline gets missed. You receive simple electronic checklists of tasks whenever we need anything from you; you can simply upload docs or comment the answer as appropriate, and discussions about specific tasks stay in one sensible place rather than buried in email chains.

Have they defined their processes and shared them with you?

Accounting and bookkeeping should be simple and clear from the start. If you ask your accountant to outline the process for delivery of the service, they should give you a clear answer and be able to walk you through the process.
We have defined work schedules for all ongoing work and have also mapped our processes if you would like to see in advance - see out process maps.

Do they use invoice capture tools?

An efficient invoice capture process is one of the things that stands to save you the greatest amount of time. Look for the approach that minimises the time it takes for you to get your expenses to your accountant.
These tools greatly increase your bookkeeper's efficiency too, and practices that use these tools will charge you fewer hours for the same level of transaction volume.
We use Receipt Bank for efficient invoice capture. All you do is forward invoices on email (including images of receipts) to your dedicated email address, e.g. [email protected]receipt-bank.me, and we do the rest: reading, matching and categorising expenses.
If you have regular suppliers, just set up an auto-forwarding rule. If you have tons of paper expenses, download their app and quickly snap pictures of them for instant upload.

Do they rely on third party ecommerce bridging software?

Look out for practices that rely on 3rd party software. In isolation, there is nothing wrong with using 3rd parties to bridge say Amazon and Xero data.
However, if they are not able to work with the raw data, troubleshooting becomes tedious, and if you decide to sell on an ecommerce platform they are not familiar with, you may find yourself unsupported and with bookkeeping work ending up back on your plate.
We have processes and internal software developed to handle data from Amazon, Shopify, eBay, Etsy, Magento, WooCommerce, Wix, and more. We are also able to work able to work with bridging software such as Link My Books and A2X which aids in delivering continuity for clients who are already using these software packages.

Will I need to download data and send or configure software myself?

Some accountancies are not set up to take the getting of data off your hands. Others will get you as the ecommerce store owner to configure your integrations yourself. Look for an accountant who will do this for you as it will save you time and stress down the line.
We get your platform data for you, regardless of platform as we are not reliant on external software to handle this data. With us, the only thing you need to do is forward us your expenses (and occasionally renew your bank feed connection).

How many ecommerce businesses do they deal with?

It is well worth knowing whether your accountancy has real experience dealing with ecommerce. Sniff out the ones who actually have little experience dealing with ecommerce, dropshipping, or your specific business model.
You will find yourself spending a lot of time explaining how your business works, and when you ask questions, expect a slower response time if your accountant has to research something novel for them.
Ask them outright how many ecommerce businesses they and specifically your potential accountant has dealt with, and whether they understand your business model. Do their accountants/bookkeepers deal with only ecommerce or are they unspecialised?
98% of our clients are ecommerce businesses, and the other 2% are clients side businesses like contracting/consulting companies or property companies. We currently serve 250+ companies.

Can they advise me on international tax?

International tax is something a typical accountant will have no cause to look into for the majority or all of their professional career. Check whether or not your accountant is familiar with any of the implications of buying and selling goods overseas.
We routinely deal with global sellers and help with their queries on international tax. While we cannot file international tax returns for you, with the exception of digital service VAT MOSS returns, we know how best to go about complying and will introduce you to the appropriate partners as and when required.

Do they charge separately for management reports?

Management Reports are available at the click of a button in your bookkeeping solution. Repackaging and selling these reports is a unscrupulous and unfortunately common practice.
If management reporting is charged separately check that it comes with associated context and dialogue around what the figures mean for your business and potential actions to take.
We will show you how to access your management reports as part of our bookkeeping set up with you. Reviewing your management reporting is available on request.

Can they tell me how pricing will change as my business grows?

Your accountant should be upfront and clear with you about how your costs might change as your business changes. Ecommerce businesses tend to grow faster than traditional businesses, so make sure you are able to get a clear picture on how your accountant will charge if your business doubles in revenue or starts selling on new platforms.
We have standardised pricing which applies to roughly 95% of our clients, the other 5% being businesses at the £2m+ mark where accounting needs start to become substantially more varied. This is something we are able to offer due to our exclusive focus on the ecommerce sector.
You can see our complete pricing breakdown here.

Are there additional costs for set up and what kind of things are out of scope?

Ask outright if there are additional costs. Knowing what is in and out of scope is key if you want to avoid surprise bills down the line.
We do not charge a set up fee for taking on a new client. Your bookkeeping set up is free, as we want to see you set up correctly from the start which saves everyone hassle down the line.
Work that we consider out of scope which we may charge you for additionally if requested includes :
  • advisory and research work that is not relevant to UK tax law VAT, e.g. US Sales Tax returns (although we do provide limited guidance on this topic as it is relevant to our client base)
  • work that requires not just advice but also preparation work, e.g. an R&D claim
  • personal tax advice (with the notable exception of tax advice on the right salary and dividend pay structure which is included as standard), e.g. residency tests, financial and investment advice, etc.

Are you tied into a yearly contract and what is their refund policy?

Check the terms of your agreement. These days most engagements are on a monthly rolling basis and billed monthly too. Be careful of tie-ins and terms where none of your fees are refunded if you decide to change accountant before year-end.
We operate on a monthly rolling contract. If you leave part way through your first year with us, we will refund all fees for work not rendered, minus one month's accounting fee to cover the initial set up and admin work. If you leave in the second year or later we will refund all fees for work not rendered.
'Work not rendered' means work not yet carried out for you. For example, if you have paid us 10 months of accounting fees and 10 months of bookkeeping fees, and you leave in your first year, we'll refund you 9 months of accounting fees and 1 month of bookkeeping fee (assuming we have completed your books up until the end of the ninth month).

What is their policy on handling VAT investigations?

Whenever you submit a VAT return which triggers a large repayment of VAT, you are likely to be audited by HMRC. Some accountancies bake VAT investigation insurance into their base fee, whilst others charge on an hourly basis.
We do not believe the practice of charging VAT investigation insurance is fair because the trigger for VAT investigations is quite predictable, and over time will almost certainly work out as bad economy for you.
We charge based on the nature and complexity of the VAT investigation, which are typically resolved quickly since we have plenty of relevant experience and prepare our VAT returns in a manner that makes VAT investigations quick to handle.

How long does it take to get started?

Sometimes you may have a deadline but the accountancy you are speaking with may be willing to take you on, but in reality will not be able to onboard you and begin preparing filings for you for months. Be careful to check typical onboarding times and get firm commitment as to whether or not meeting your next deadline is feasible.
We can get started the next day after signing you up, and typical turnaround time for being introduced to your accountant is five working days. We have built in flexibility to our workflow management so that we can accommodate the occasional urgent case.
Whenever you begin speaking with us, you will speak to one of the two partners of our firm, who will be in a position to tell you with a fair degree of certainty if something is possible or not.

What are the rules of engagement?

You should be confident from the outset what is in scope, and what is expected of either party in the relationship. Look for an accountant who has clear rules of engagement that work for you - this is going to be a huge driver of your long term satisfaction with your accounting relationship.
Our rules of engagement are outlined below - please read carefully as we won't necessarily be the right fit for every business!
Ecommerce Accountants Rules of Engagement
The goals of these rules are to help us serve our clients well, make sure expectations are met, and create a great and lasting working relationship.
Our commitments to you:
  • We have processes in place to ensure that we respond to all emails you send us in a timely manner.
  • In our communication with you we are polite, proactive, constructive, concise, and if it is possible humorous (but no guarantees for the latter).
  • We are entirely open and transparent with all processes and costs. You should feel comfortable asking any question and the worst that can happen is that we explain that it is out of scope and why.
Our 5 requirements of you:
  • If we schedule a meeting, you join on time (or cancel ahead) We occasionally schedule audio/video calls to speak with you for more complex topics or when setting up a new service. Missed meetings cost time and deny others the opportunity to use this slot, so please make sure to use the cancellation or rescheduling links provided in all meeting invites in good time if needed.
  • You are responsive to our emails and complete tasks assigned before their deadlines For each of the filings we prepare we will occasionally need input from you. Whenever we need something from you we will assign a task with a deadline to give us enough time to file in time to meet HMRC's deadlines, e.g. for VAT returns we need your expenses for the quarter, by three weeks after the quarter ends, leaving us two weeks to prepare your return. The deadlines we set allow you plenty of time to complete anything required of you, and lets us ensure our workload is manageable across our client base.
  • You will be comfortable asking if you are unsure of anything and raise any potential issues early We're rated ⭐⭐⭐⭐⭐ by our clients and and we want to make sure it stays that way! Any, issues, concerns, questions, please raise them early so we can address them before they become a problem.
  • Our modes of communication and responsiveness work for you We communicate mainly on email and occasionally on phone/video. If you are looking for an accountancy who you can phone and get an immediate answer all days of the year, this is not us (unless your query is truly urgent - we always run a skeleton shift during holiday periods). Our turnaround time for resolving accounting queries is high because in 99% of cases you will be asking a question another ecommerce client will have asked before you. Better still, we're going to be getting in touch with you proactively when there are changes in tax law that affect your ecommerce business. Our typical turn around time for resolving a query ranges from 1-3 working days depending on complexity. If you tend to send an email at 5pm on a Friday and chase again at 9.15am on Monday (you know who you are 👀), then we're not the right fit for you.
  • You are nice! We are a pleasant bunch and we hope you are too! Rarely, but enough to warrant stating as a requirement, the tone of communication we receive is too aggressive or of a "I-pay-you, do-as-I-say" style. Please remember, we're a team of accountants and bookkeepers and (contrary to widely held beliefs) have emotions and skins of various thicknesses. For example, you can swear at Steffen all you like and he will probably give it right back, but in general your communication needs to be positive and constructive. Politeness, conciseness, humour are desirable traits, but not required.
Last modified 10mo ago