IT Contractor Accountants - Find the best Accountant

The world of contractor accountancy has come on leaps and bounds since the good old days when you'd stuff your receipts, expenses and timesheets in a brown envelope once a month and hope for the best.

Most leading accountancy firms have embraced online technology to some degree, although the user experience would appear to vary greatly from firm to firm, according not only to the software on offer, but also to the quality of service provided behind the scenes.

How 'online' is your accountant?

Roughly speaking, there are five main types of contractor accountant in the market currently:

1. 'Old School' - very much a paper-based operation, where you send all your timesheets, expenses, receipts and other official documents via the post.

2. Spreadsheet-based - where you complete a spreadsheet each month (detailing your expenditure and income), and submit this online, or via email.

3. Offline software - where the contractor uses commercial accounting software, and then shares the data with his/her accountant.

4. Online software - the contractor enters income and expenditure detail, and the accountant can also access and update the data via the web. This software can usually bolt on to existing accountancy systems.

5. Completely online - several firms now offer a seamless online service, where all communications are managed and stored via the 'cloud'.

Some benefits of online accountancy

• Using any type of effective web-based accountancy software is a significant time saver for both contractors and their accountants.
• You can view a snapshot of your current accounts at any time, and input data 24/7.
• Most online software will enable you to raise client invoices.
• Many online packages will validate the data as it is submitted, reducing the scope for error.
• Accounting software allows you to reconcile your accounting data with your bank account statements.
• You can store scanned copies of receipts and other paperwork online, for easy reference at any time.
• Payslips, dividend vouchers, and other information (such as a statement of account for each client) can be created in seconds.
• You can even submit forms (such as your VAT return) online to HMRC with some packages.

Other considerations

• When researching the contractor accountancy marketplace, be sure to compare like with like. If it is important to you to have access to online services, make sure you know how 'online' a provider really is.
• If you already use an independent accountancy package (such as FreeAgent), many contractor accountants will be happy for you to carry on using the software, and may even provide a discount on their standard fee.
• Depending on the accountancy model, you may still be reliant on your accountant keeping your accounts up-to-date if you don't manually enter your income and expenditure yourself.
• Access to an online service can be a major benefit, although you should also consider other factors when choosing an accountant, especially the service you can expect when you need 'offline' help and advice.

For a more in-depth take on the online marketplace, try our guide to contractor online accountants, penned by James Poyser.

You can browse our director of accountancy service providers here.

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