Nearly every established business has an accountant. At the very least, you should pay a qualified accountant to prepare or review your financial statements and taxation returns at the end of the financial year. But there is more to accounting than tax.
An accountant should be your single most important outside adviser and potentially have the greatest influence every year on how your business operates.
Ideally, an accountant should help you organise your business’ financial data, assist in charting future actions based on past performance and advise you on your financial strategies for purchasing, capital investment and other matters necessary to achieve your business goals.
Another reason to engage the services of an accountant is that when you want to borrow money, your bank manager will ask to see your balance sheet and profit and loss statement.
If these have been prepared by a reputable accountant, the documents have more credibility than if you prepared them yourself. Sometimes the bank may require self-prepared accounts to be audited.
Choosing an appropriate accountant and building a good professional relationship is one of the foremost tasks of financial management.
How To Evaluate Your Accountant
Like people of all professions, individual accountants have their own strengths and weaknesses. Assess the capabilities of your accountant – have you got ‘the best’?
Ask yourself these questions:
Does your accountant understand your business?
Does he/she take an interest in your success?
Does he/she offer other services, such as preparing business plans?
Can you get a quick answer to a simple question by phone or e-mail?
Does your accountant offer to provide long-term strategic advice?
Do you feel comfortable talking to your accountant or does he/she blind you with technicalities?
Does your accountant offer a free newsletter with business/tax tips?
If you believe your accountant is not suitable based on your assessment, consider changing your accountant. You want an accountant that can meet your objectives and knows and understand your business.
Where do you look for a good accountant? Ask other small business owners, your banker or even your lawyer for recommendations.
You should choose an accountant who is a member of the CPA, the ICAA, the NIA, or similar organisation.
Members of professional accounting organisations abide by strict ethical codes and maintain a program of ongoing professional development to keep abreast of changing accounting practices and tax laws. They also should carry malpractice insurance.
Where possible, choose a firm of accountants that is large enough to employ several specialists who you can call on when necessary. For example, it is helpful to have someone with expertise in business planning and superannuation available within the same firm as your accountant, so that the expertise is available when required.
There are also some accounting firms that specialise in certain industries. Try and find out whom these firms are, using your industry contacts or through advertisements placed in industry magazines. An accountant that knows the industry has obvious advantages.
How Much Does A Good Accountant Charge?
Accountant’s fees, like those of lawyers, doctors and other professionals, vary widely.
A small-town accountant may charge around $90 an hour, while some of the large, national firms charge $100 to $250 an hour or more for the services of their personnel, depending on their position and experience.
Before committing yourself to an accounting firm, ask for an estimate of charges for a specific job as well as their hourly rates. You can then decide whether their charges represent good value for money.
If you choose the right accountant, normally they can add considerable value to operation of your business.