What’s the difference between an accountant and a chartered accountant? - More Than Accountants

What’s the difference between an accountant and a chartered accountant?

In a variety of crucial sectors, a chartered accountant can provide specialised accountancy services and business advice. The primary distinction between an accountant and a chartered accountant is that the latter is usually more qualified and experienced, as well as a member of a professional organisation. If your accounting needs are simple, you may not need to pay the extra amount for a chartered accountant; but, if your needs are more sophisticated or specialised, the higher fee may be well worth it.

What is the definition of a chartered accountant?

A chartered accountant is a professional accountant who has earned the designation of ‘chartered status.’ They have a strong background in accounting and have worked in the field for a long time. Furthermore, chartered accountants are members of a prestigious professional group, such as the CIMA (Chartered Institute of Management Accountants), and are bound by a strong ethical and professional code.

The Institute of Chartered Accountants in England and Wales (ICAEW) reports that 30% of its chartered accountants work for an accountancy company. The rest work as a solo trader, work for a multinational accounting firm, or manage the accounts of another company. They’re frequently found in positions such as CFO (Chief Financial Officer), where they’re in charge of the company’s most crucial financial decisions.

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How much does a chartered certified accountant charge?

A chartered accountant’s fee will be set by a variety of criteria, including:

  • Your annual revenue
  • How many workers do you have?
  • What is the frequency with which you will require their services?
  • What is the complexity of the situation?

Chartered accountants are more expensive than accountants, regardless of your needs. While basic accounting services from an accountant normally cost between £25 and £35 per hour, specialised tax planning or company planning assistance from a chartered accountant can cost up to £150 per hour (also see how much does an accountant cost in 2022).

What is the role of a chartered accountant?

Chartered accountants can provide guidance on specific business and financial concerns in addition to conventional accounting services. These are some of them:

  • Securing financing for mergers, acquisitions, and capital restructuring is an example of corporate finance.
  • Financial management in a company, such as detailed cash flow forecasts and fund management
  • Financial guidance for individuals (for both individuals and companies)
  • To assist in commercial fraud cases, forensic accounting is used.

Many chartered accountants can provide advice that conventional accountants cannot because of their extensive knowledge. They frequently have specialised experience in a particular industry, such as working with High Net Worth Individuals (HNWIs) who have more sophisticated personal finances or estates, or testifying as accounting experts in criminal trials.

What’s the difference between a chartered accountant and an accountant?

The title of accountant isn’t a protected phrase, which means you don’t need any special training to use it. An accountant may have studied accountancy at the foundation level through the AAT (Association of Accounting Technicians) or obtained experience through years of work. They will also have to follow the Corporate Governance and Stewardship Codes of the Financial Reporting Council (FRC). You may learn more about what an accountant performs here.

To use the title chartered accountant, however, an accountant must pass a series of exams and acquire professional accreditation after three to five years of work experience. A chartered accountant can join either the ICAEW or the ACCA once they have completed their studies (Association of Chartered Certified Accountants).

Professional indemnity insurance is required of chartered accountants who are members of a respectable professional body such as the ICAEW. This safeguards both you and the chartered accountant in the event of unintended errors. Chartered accountants are likewise governed by the ethical regulations of their chosen professional organisation, and their membership can be revoked if they do not follow the rules.

Further Reading: Cost for accountant to do self assessment tax return?

When do I require the services of a chartered accountant?

General accountants can help with day-to-day issues including annual tax returns and invoicing. If you have a query concerning VAT, for example, you don’t need the more expensive services of a certified accountant. If you’re in a more complicated financial situation and require expert help, you should consult a certified accountant.

A chartered accountant, for example, will assist you in developing a detailed financial strategy prior to the acquisition of a smaller firm if you own a corporation. They’ll walk you through the entire process, including how to get the necessary money and how to continue in the most tax-efficient way possible.

Chartered accountants can have in-depth knowledge of a wide range of financial matters, from tax planning to cash flow forecasts, depending on their previous experience. Though all chartered accountants are highly qualified, locating one that specialises in a specific industry will help you achieve the greatest results.

During a consultation, what questions should I ask my chartered accountant?

During your initial appointment with any chartered accountant, you should ask a number of questions. To get you started, here are some ideas:

  • What is the cost of your services? Before proceeding with any more negotiations, it’s critical to determine how much your selected chartered accountant costs; otherwise, you’ll be wasting both parties’ time if they’re out of your budget.
  • What are your credentials as a professional? A chartered accountant must have a practising certificate from a reputable organisation such as the ICAEW or the ACCA. If they can’t provide you confirmation of this, they’re probably not a real chartered accountant.
  • Do you have any prior experience in my field? You can discover if a chartered solicitor has the knowledge to help you by asking if they have worked in your industry or done similar work in a similar area.
  • Is it possible to see some examples of your previous work? If you need help with a specialist issue, this is an especially crucial question to ask. Knowing how your chartered accountant has assisted other clients with financial restructuring, for example, will help you determine whether the connection is good for you.
  • Do you enjoy taking the initiative? You might be looking for a chartered accountant who actively suggests ways to manage your finances, or you might prefer a chartered accountant who waits until you need them. It’s a good idea to get a better understanding of their attitude toward client interactions.

Related Topic: Nine reasons to switch your accountant

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