Accountants: do we need them?

13 November 2007
Page 1 of 6 : single page

It matters not what type of business you are in, sooner or later you are going to need the help of an experienced accountant. A good accountant will be able to advise you in all areas involving the operation of your business so that it becomes profitable.

Another area is tax law, which require a certain amount of tax expertise. While advice and assistance may be obtained from the Tax Office, a tax accountant is independent and therefore the best person to discuss these matters with.

If you are in business, be sure look for the type of accountant who is able to provide the services that you have decided is your top priority. For example, if taxation minimisation is your main objective, then look for an accountant who has expertise in tax. Many Accountants knows little about tax so always seek a specialist. It's like choosing between a general practitioner and a brain surgeon if your need is specialist surgery.

Accountant services

An Accountant can provide you with help by way of financial information and advice. His or her duties could include - the preparation of the financial statements of the business, assisting with costing and budgeting, planning cash flows and cash requirements, completion of taxation work, filing of company documents, arranging share valuations, providing management reporting, working on special projects, undertaking staff selection, assisting with securing loan finance and many other similar duties.

Here's a summary of some of the things that a good accountant can help you with in your business:

Guidance in all areas of your business set up, operation and growth.
Taxation - preparation of taxation returns and accounts for the Tax Office, as well as sound tax planning to minimise tax.
If the Tax Office undergoes an audit of your business affairs, your accountant is a handy person to have alongside you.
Management accounting - your accountant is able to assist you in putting in adequate systems for the extraction of business information to enable you to monitor and manage your business.
Prepare strategic business plans and other plans for the business, as well as information for outside parties.
Put together information to support loan applications that you may make to a bank or other lender.
Able to provide help with superannuation matters.
Assist you in assessing a business that you may be looking at buying or putting together the necessary information to enable you to sell your own business.
Help put in systems for day-to-day records that your business needs to keep.
Assist with installation of computer requirements, as well as assessing various accounting and business software's that would be useful to your business.
Assist in setting salary levels for your staff or management, after taking into account what the market is offering.
Work alongside you as the business owner on a monthly basis to help guide your business to success.

How and where to find good accountants

There is nothing like getting a recommendation by another business owner when you are looking for a good accountant. Ask around amongst your business associates or other companies and businesses in the same industry as yours. You can call the local association for accountants to get a referral, or even look up the Yellow Pages and ring two or three so you can sound them out over the phone. You will need to find someone that you feel you can work alongside. You need to feel that the accountant will have a genuine concern for your business and its success. Eventually your accountant will need to know every detail about your business, your family and other interests, in order to look after you to his or her best ability. Find someone you can trust and whom you feel will be there when you need him or her.

Once you have assembled a list of potential accountants, then the next step is to make an appointment to see and check them out.

How to pick your accountant "person"

How do you choose the right person to be your accountant? The best thing to do is to make an appointment to see an accountant and take along with you a list of the questions that you would want answered at the interview. It should be emphasised once again that you need an accountant that has experience in your industry and who is able to help you in the business area that you are looking at. Apart from ensuring that the accountant is experienced and competent there are other things that you should be satisfied about before making a decision.

These include:

Is the person a qualified accountant with formal accountancy qualifications?
Does he/she belong to any professional organisations in the accounting field?
Does he/she specialise in the area for which you are seeking help?
What size is the firm? If it is a large firm, who will be dealing with your work?
Is he/she able to provide personal attention as required?
What is the accountant's hourly fee charge?
Will he/she be doing most of the work, or will it be shared out between others in the firm - if so, are the others qualified?
Is the accountant familiar with the accounting software that you have operating in your business?
Is the accountant able to represent you when you have disputes with the Tax Office?
How often does he/she require you to supply information for the completion of accounts etc?
Will the accountant be prepared to support you in any disputes with outside companies or government agencies, or is he/she more concerned with the reputation of their firm.

Once you are satisfied with answers to these questions, you must then ask yourself probably the most important question of all - do you feel that you can get along with the accountant? If the chemistry is right and you feel that the credentials are acceptable, then ask the accountant for one or two clients that he/she can recommend for a reference. If this is not forthcoming, then you can only conclude that the accountant will not be open with you. That may be a good indication to move onto someone else.

How to pick your accounting "firm"

The following are some steps, to follow when looking for an accountancy firm:

The firm should be easily accessible and have your interests at heart.
The firm should be very familiar with your industry and if possible be recommended by a trusted acquaintance from the same industry.
Reputation of the accounting firm has to be taken into consideration.
Bear in mind that you pay for what you get so shop around.
Banks, Franchisor's, head office staff, friends and other business owners can generally give you a good guide on who to go with.
Remember, your "gut feel" can be valuable when weighing up your options.
Don't ask other accountants for their opinions. Professional jealousy sometimes prevents an unbiased opinion. Ask another local businessperson.
In general, if yours is a smaller or medium sized operation, seek a small to medium size accounting firm to look after your affairs.

Accountants are great for financial and business advice but the responsibility for proper records and business practice will always be your responsibility. In every case a disclaimer clause will free accountants of all wrongdoing if they base their work for you on records, statements and explanations you provide.