How to Choose the RIGHT Accountant for Your Business
Whether you are starting up in business or your current accountant is retiring or selling his business, you might have to be in the process of looking for an accountant. Even if of none of the above is happening, it might be a good idea for you to evaluate your current accounting service just to ascertain whether you are getting a good service for your money after all.
What is meant by a "good" service? A service that provides some real, "tangible" benefits to your business. A service that assists you to have control over your finances, make easier and better decisions to grow your business and increase your profits and a service that saves you taxes.
Traditionally, the problem with evaluating accounting services has been that, it is very difficult for a non-expert to assess the quality of a technical subject without having the necessary knowledge.
As an analogy, you cannot assess whether a doctor is a good one since medicine is a highly technical subject with a professional terminology not understood by the layman.
The only safe way to judge a professional's efficiency is judging from the result of the service, after the service has been delivered.
But, would you risk your health (or your financial health) by entrusting blindly somebody with your health problems (or financial affairs)? It would be unwise of course, as you would be exposed to the risk of suffering a health deterioration (or a financial loss) without knowing it until it was too late.
Somebody might say that if an accountant is qualified, that's a good enough guarantee. Well, partly there is a point there. There is definitely much more security than hiring a non-qualified accountant. But, definitely, far from a guarantee.
Why? Because, first of all, in every profession, one meets the "rotten apples". And secondly, it's a matter of what your expectations are from your accounting service. If all you ask your accountant to do is bean counting, form filling and compliance services, you are certainly not getting much value out of him as opposed to asking him to provide you with some real assistance in financial planning to grow your business and tax planning to minimise your tax bill.
Below we will try in plain language to give you some pointers you should look for in your pursue for an accountant that will provide you with a truly beneficial service. Those pointers result from our many years of interacting with small business owners. They can lead you into arriving at some real life-saving conclusions but at the end of the day it's up to you whether you use them or not.
According to a recent survey that took place in the USA among small business owners, a small business should first judge the quality of the accounting service it receives from its current accountants by the amount of personal attention and care they get from their accountant.
Meet with the prospective accountant(s) you've chosen, and ask your questions. There's nothing like a face-to-face meeting for gauging how well you might work with another person. Don't be afraid to ask questions about the person's ability and years of experience. Question what educational or professional qualifications they have and how often they are being upgraded.
Besides assessing the accountant's knowledge , see how comfortable you are with him or her and how well the two of you communicate with each other. When you choose an accountant for your business, you're going to be establishing a long term relationship, so feeling comfortable with him or her is important.
Is he talking to you in a technical language, full of jargon, that you don't understand? If yes, you might not be able to use the information about your business that he will communicate to you in the future. That means that you might not be able to spot any problems or opportunities and make those important decisions to alleviate the problems or utilise the opportunities.
Bear in mind that the right accountant for your business is the one that will be helping you by educating and training you to ask the questions you need to ask to understand your finances. The one that teaches you to play the role of sceptic and be wary of underlying trends or unreasonable results.
Choosing an accountant with expertise in your industry makes sense. Business is so complicated and nobody can be everything to everyone.
If you have a small business, he should have small business experience. There's a big difference between big corporations and small corporations - choosing the right accountant can make all the difference between success and failure for small businesses that need advice on everything from taxes to financing to succession planning.
Choose someone who fits the size of your firm. If you're a small business, you don't need a large firm. Try to choose somebody who's about the same size as you.
Ranked second in the survey was the accountant's advisory ability. He should be able to advise the business owner on ways to increase his profitability and cut expenses.
Clients tend to be fee-sensitive for services where it is harder to differentiate accountants from one another- such as normal tax preparation. Understandably they want to shop around. Even a computer can currently prepare the client's tax return. A good accountant should not be just good bean counter or tax form filler. A good accountant is needed to assist the business owner maximise tax savings. Moreover, a good accountant is needed to interpret data and assist in management decisions.
Independence and integrity are also considered crucial determinants.
It is imperative that a small business hires a qualified accountant. The biggest advantage of qualified over unqualified accountants (other than knowledge) is that if something goes wrong, the client can claim against the accountant's professional indemnity insurance fund. Also, qualified accountants undergo compulsory continuing education programmes to ensure they are up to date with latest developments in their field.
A good accountant should be able to address the clients' needs quickly by returning their calls and answering their queries promptly. That will ensure that clients do not miss any deadlines and do not suffer penalties because of that. That also makes sure that opportunities are taken advantage of and problems are dealt with early enough.
Cost:
The true cost of an accountant is not the amount of fees you pay him. It might actually be the opposite. A very cheap accountant might give such a poor service that at the end of the day deadlines are missed, taxes are overpaid and no business growth advice is given in an understandable, accurate and timely manner on how to utilise positive trends or how to spot problem signs before they become big and costly.
In almost all cases, the cheap deal someone received by getting their tax return prepared by a friend or an inexperienced accountant costs them more than they ever imagined in taxes, back interest or just the stress of going through a tax audit.
Bear in mind that an accountant who is poorly paid, to recover his rate, will only provide the minimum of services i.e. compulsory services like accounts preparation for tax filing reasons, payroll and bookkeeping. Those services are not giving any real value towards the goal of either assisting with growing your business or saving you taxes.
By choosing an accountant who has in place the right "products" that will enable your business goals to be achieved and save taxes, is turning out to be more profitable to you in the long term.
It is difficult to judge a book by its cover and business owners must use good judgement in selecting their financial advisors. Remember, it is ultimately your business success and your taxes that is being affected.
Please feel free to use all the information that you will find on the web site.
If you have questions, please feel free to contact me personally at any time. You can call, e-mail, fax or write to me and I will be happy to answer any and all of your questions.
Good luck in your business ventures!
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