5 signs of a pro vs a burden accountant
Have you ever wondered if your accountant is doing a good job?
Many companies and self-employed change accountants every year, but have you wondered what could be the reason behind it? Or do you belong to that group of people who are thinking of switching this year? There could be many reasons, but these below are the most common indicators.
As an accountancy firm, we don’t really have to worry about this question whatsoever as you can imagine. But when someone does not know much about the topic, then there could be some doubts going around in your head about your finances. Hopefully, with this article, we can help you see if you are served well or there might be some key points that you need to review with your accountant.
So, what are the key principles which could help you decide if you pay for good or bad service?
1. How much tax do you pay?
The first and one of the most burning questions is to see if you pay more than you should, or if your taxes are in good hands.
Good accountant – Complete tax support
You will pay exactly the right amount of tax, at exactly the right time. Regular tax reviews and forecasts will assure no stone will be left unturned in ensuring you pay the minimum legal and ethical level of tax.
Bad accountant – You’ll pay more tax
Poorly structured businesses hemorrhage money in overpaid taxes. A simple lack of pre-year-end tax planning sees HMRC collect £billions in overpaid taxes. To let you into a secret, HMRC only wants you to pay the tax you owe, not a penny more.
2. Do you have enough time for your business or do you find yourself preparing paperwork for your accountant?
The question is, how do you make money if you are too busy processing invoices, doing the bookkeeping, or just simply keep fulfilling the requests that your accountant has for you at that moment.
Good accountant – A fully operating accounting function
You have an automated and integrated accounting process that will ensure you spend the minimum amount of time possible on your accounting administration, allowing you to focus on what you do best, making money.
Bad accountant – You’ll waste time and money
The accounting function is dead time, it makes you £0, nothing. It simply costs you time and money. It needs to function at the click of a button and not hours of mundane data entry. Meaning that software and automation are non-negotiable. A poorly structured accounting function wastes hours of time, consequently, stops you from earning and costing you money.
I believe that at this point, you have started to see the point of this article. In yourself, you are actually counting the points against or for your current accountant.
3. How well do you understand what is happening in your finances?
Just because you are not an accountant, you still need to understand your accounts. What the numbers mean, how to find something in the software and figure out any additional data from those graphs.
Good accountant – An understanding of your accounts
Accounting is not a dark art; it is a logical and sequential process. Your accountant needs to make sure you know how to utilise the software in your accounting information and interpret the information it produces for you.
Bad accountant – You’ll become completely reliant on someone else
Leaving everything to your accountant to ‘sort’ without the knowledge of what they do, how they do it and why they do it, leaves you hugely exposed and vulnerable. Not understanding your financial situation or how to get a view on it can result in terminal business disasters.
4. Can you confidently make the right business decisions regarding the future?
Your business can survive for quite some time, even if you do not make all your financial decisions based on the accurate data, provided by your accountant. But how long can you survive like that and how much do you want to suffer on that journey?
Good accountant – Insights and reports
You receive regular updates on your key business metric, Sales, Profits, Cash and Tax so know where you are now and where you are likely to be in the future. Allowing you to plan your future growth with confidence and assurance.
Bad accountant – You’ll Make Uninformed Decisions
Cobbling your VAT accounts together every quarter, or your accounts 6 months after the year-end will give you absolutely no insight into the position of the business. You will have no idea about the potential tax bills that could be due imminently. A lack of real-time accounting information means you could make potentially business crippling decisions, or worse miss out on hugely profitable opportunities.
Remember, that you pay for your accountant’s service, so you have the right to question if they don’t do some of these things. You deserve to be served the best possible way, to receive what you should.
5. Can you reach your accountant every time you need them, can you rely on them? Do they provide extra support when needed?
This is one of the most crucial reasons why clients leave their current accountant. They cannot get hold of them. They cannot get an answer to a burning, important question right away. These all can lead to future problems, extra money to pay, missed deadlines, missed opportunities etc.
Good accountant – Quick and reliable information
Being able to get hold of your accountant can save time and money as well. A great relationship between you is mandatory for your business to be able to flourish. There are plenty of situations when you need a piece of advice, a deep conversation or just a quick answer for an easy question, and your accountant needs to be contactable.
Bad accountant – Frustrating, unknown and time-consuming situations
Trying to get hold of the person who is liable for your accounts without success is frustrating. It is also time-consuming. You could deal with other more important things, make sales or just spend some quality time with your family and friends. It also makes you feel that you are just lost in that moment, and not in a positive way. You are unsure what to do or what the next step should be. That means you might not do something that needs to be done or do it too late.
All of the above are essential to your business to be provided by your accountant. There could be so many more, but I am sure you got the hang of the importance of having a good accountant, who can help you grow your business with all the support and information they provide.