Accountants are important to Small Businesses, but it is really important you get the right one. Does your Accountant know how to use the Accounting Software you use? Are they up to date with the current software available? Are they well informed of where your business is at and where it is heading? If not it could be costing you thousands more for your accounting than you need to be paying.
Accountants and Software
I have spent many hours teaching Accountants different Accounting Software. When I first started bookkeeping the only program that most Accountants knew was MYOB and then they didn’t use it that often.
There seems to be two types of Accountants at the moment, the first one will transfer all your information that you have entered into your accounting program into their software, they will relook at every docket and receipt and basically do your bookkeeping over again. Or they will ask you that many questions that you wonder if they have even looked at your file in the Accounting Program you use.
And then there is the Accountant who understands accounting software really well and will work straight from your file, do any adjustments that need to be done straight in your file, only transferring final figures across to their lodgement program. They take half the amount of time as the Accountant above, but still have up to date knowledge about your business and where it is headed.
Some Accountants will only know one program really well and then other programs average. You really need to find out what programs your Accountant knows? And especially, do they know the program you are using really well? Are they keeping up to date with the software improvements?
There are some Accountants out there still that don’t know any Accounting Software Programs and rely heavily on other people in their firm to provide the with reports and information.
Accountants for the Small Business Owner
As a Small Business Owner you need to have a great Accountant, but what does a great Accountant look like, I hear you ask.
In my opinion there are two types of Accountants (non of them bad), you have the Tax Accountant who is so focused on Tax and making sure you are claiming everything and doing every thing right that they don’t actually relate to you as the Small Business Owner.
Then there is the Small Business Accountant. They love working with Small Businesses, helping them make decisions and get ahead in their business. They are great with your tax returns, but they are also great with small business advice.
I find that Tax Accountants are more important when you are a medium to large business and the Small Business Accountant is great for the small to medium business.
Reducing your Accounting Costs
Often people employ bookkeepers to try and reduce their Accountant’s prices and most times this doesn’t work, so the business owner is stuck paying for a Bookkeeper and an expensive Accountant. I have never known an Accountant to reduce their price. If they charged you a certain amount last year, they will charge you the same amount this year, or even more.
Usually at this stage the Small Business Owner decides to drop the Bookkeeper, as they have known their Accountant for a long time.
Now this is really a backward move in my opinion (not just because I’m a Bookkeeper ☺ ). But because the pressure of doing all the bookkeeping and keeping everything up to date and tidy, in order, debts collected and bills paid then falls back onto the Small Business Owner or one of their family members, increasing stress and putting more pressure on everyone.
I find that the only way you will ever reduced your Accountants bill is by changing Accountants. But before you do this do some research and make sure that the potential new Accountant uses your software program and is fluent enough in it that they don’t have to transfer your figures to their Accounting Software.
Is your Accountant actually doing the work themselves?
Unless your Accountant is in a Practice by themselves, it is more than likely that they are not the ones doing your Accounting. Most Accountants will have themselves a ‘junior’ of some description. And this is fine if the Accountant still has their finger on the pulse.
One of my clients had an Accountant who, when out on his own was amazing, kept everything happening and running smoothly. When he joined a larger firm and had staff under him who were doing the work, he started to drop the ball.
You would go into meetings with him and he would have only recently read the figures that his juniors had handed him. He would sign off on stuff and tell you it was correct, when it was nowhere near correct. You would ask him questions about certain matters and he would have no idea what you were on about, as he hadn’t actually seen the issue you were talking about.
Then some of my other clients have an Accountant who is in a large firm and you know he has people working under him, but he is just amazing. He will know all their information inside and out, give them advice on what they should be doing and be able to answer any question they have. Even though there are people ‘under’ him doing the work, he is still keeping himself informed and up to date with their businesses and is able to advise them correctly.
If you are doing an assessment on your Accountant, or looking at changing Accountants, make sure that you look for the following things as part of your assessment:
• Do they know Accounting Software well?
• Are they keeping their Software knowledge up to date?
• Are they keeping their Accounting knowledge up to date?
• Will they be doing their work in your file or creating a new file using their software?
• Are they a Tax Accountant or Small Business Accountant?
• What would suite you better a Tax Accountant or Small Business Accountant?
• Do they do the work themselves or get a junior to do it?
• If they have someone working under them, do they stay well informed about your business so that they are able to help you and advise you correctly?
I have attached a downloadable document with the above questions if you would like to download them and keep notes on your assessment.
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