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  • #988085
    AndyR
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    Hi,

    I have been in business for a number of years, and tried a few different accountants. I have never been particularly satisfied with what they have provided.

    My business is relatively simple, I am set up as a company and probably average 4-5 invoices per month, and 20 mostly recurring expenses per month.

    Each year I provide my Quickbooks data file, they prepare the tax return and post me a comb bound copy plus one depreciation entry for me to make in Quickbooks (so presumably there are no wholesale changes they need to make to my accounts).

    Every accountant has made errors (some very large i.e. tax implications of several thousand dollars) that I have found when I checked the return before submission.

    For this they charge around $1000.

    I feel like I should be getting more value from an accountant. I would like suggestions about things I could do differently, as well as some explanation of the tax return they have prepared (this might help me find errors more quickly, rather than going through it line by line myself!).

    But, I am a bit apprehensive about what it would cost, given the hefty charge for what seems to be simple work. In addition, every time I HAVE asked for advice on how to do something from my accountant I have regretted it later e.g. the tax office contradicts what the accountant has told me, calculations are incorrect, or it generated a whole lot of extra admin for no significant gain.

    I read about people saying how valuable their accountant has been to their business. I would like some of that value, but I don’t know how to get it.

    Is there something specific I need to ask for, or should an accountant make suggestions after seeing the books? Is it unreasonable to think that the cost of preparing the return should include some face to face discussion of the result?

    At the moment I feel like the only thing the accountants are interested in is the final bill. They don’t seem to be interested in my actual business. People suggest not seeking an accountant solely based on price, but based on my current experience I see no reason not to look for the cheapest. (What is the going rate to produce a company tax return with errors, anyway?)

    Alternatively, what would be a reasonable price to pay for a relatively simple company tax return, with some discussion of what the figures mean and some pro-active suggestions? How can I find an accountant who will provide this type of service?

    #1165538
    MissSassy
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    I can gladly refer you to http://www.irinahollander.com.au

    She is a small business specialist and will not charge you a fortune. Assuming all your book work is done correctly, there is very little for an accountant to do each year and your costs should reflect this.

    I have operated many companies and emailed off the file and never paid more than $770 for the annual return – $1000 seems excessive based on your post here.

    #1165539
    Luth6322
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    It’s a pitty that you haven’t found an accountant that is right for you. From my experience $1,000 is actually quite reasonable.

    Accountants spend many years becoming qualified and continue education to retain such qualifications and accreditation. Although it might appear to take no time at all to prepare a tax return and set of financial statements, it has taken years to get to that point, and so you are paying for that knowledge, and all the overheads that go with running that practice, not just the time it takes to prepare your annual accounts. CPAs and CAs are also required to meet certain a high standard regarding there work papering, quality control processes etc..

    Accountants come into there own, when you seek advice that adds value to your business. Assistance in growing your busy, helping with cash flow, budgeting, cost and revenue improvements, plus many more topics. Compliance for many accountants is just a required service they have to provide, rather they wanting to provide.

    It is your responsibility to check your return before it’s lodged, and it’s great that you are checking these before submission. It is a pitty that mistakes are being made.

    In my experience I’ve found that in addition to your data file, a comprehensive set of work papers is really beneficial. Printed reconciliations for all Balance Sheet items, and any expense accounts that are at risk of being errors, such as Repairs and Maintenance. You should be able to talk to your accountant on what you might be able to provide to assist in this process. If the work papers are prepared well, your accountant should be happy to just copy the work papers rather then completing them for you.

    In all cases try and work with your accountant on how to save money. If all your looking for is your annual compliance work, then you might just have to shop around for a smaller accountant that has lower overheads and therefore possibly can charge less.

    I hope this provides some clarity around your question, and I hope it didn’t come across to hush.

    Cheers

    Carrie

    #1165540
    AndyR
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    Luth6322, post: 191744 wrote:
    Accountants come into there own, when you seek advice that adds value to your business.

    The essence of my question though, is how can they add value to my business? I would be very happy if my accountant would provide some useful advice. Mostly they just send a bunch of papers and a bill in the mail.

    When I have asked for advice the advice received has been in hindsight, poor. In each case I would have been better off doing the opposite to what the accountant recommended. Sometimes it has even turned out to be contrary to tax law e.g.
    “Can I claim x as an expense?”
    “Yes, you need to do y and z to create an expense entry”
    then y and z turn out to create their own complications so I ask for advice from the ATO. They tell me x cannot be claimed as an expense in this circumstance, and provide tax rulings as references that explicitly say you cannot create an expense by doing y and z.
    I forward this to the accountant, who says
    “Yes, but we have lots of clients who do it anyway”

    (A plug for the ATO here: When I have contacted them with questions their answers have been excellent – clear, and with supporting references and documentation, even if they weren’t always the answers I wanted.)

    It’s not the cost I am focused on. I would just like an accountant who WOULD provide advice that adds value, who could do a tax return without errors, and who doesn’t suggest things that are going to cause me problems if I am ever audited.

    #1165541
    bb1
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    Sorry but I cannot agree with that $1000.00 is reasonable when you only have a handfull of transactions a month, and obviously dont get any advise which is what your complaint was about, plus they make inherent errors.

    I must say up front that accountants are like doctors and only claim to practice, I think enough is said in that. When they stop practicing we may get what we are after from the accountants.

    Why can I go to 2 different accountants and A says yes I will let you claim this, but accountant B says no. It is only because accountant A is prepared to let you sail close to the wind, and rely on the 5 page disclaimer which clearly states it is the tax payers problem if anything is wrong, personally I prefer Accountant B who knows the rules and advises based on the rules.

    As long as accountants have a 5 page disclaimer you will never get good advise from them. Just some of the advise I have seen on this forum alone by practicing accountants leaves me cold, when after a 2 minute google search or more precisley ATO search, I have being able to find that they are substantially wrong, and when you query them on it, the silence is golden. As per AndyR we all need to use the ATO more, yes you can get conflicting advise at times from tem as well, but this is often how we ask the questions as well.

    Sorry must be a bad week for me, ive had a dig at IT and accountants, sorry moderators, but I have just said what a lot of people I speak to also say.

    #1165542
    Luth6322
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    Hi Andy

    Like all professionals you have your great, good and then not so good, and it’s just the same for accountants. Also you need to find the one that’s right for you, a good relationship is important.

    If i was interviewing you for the first time, I would ask a load of questions like that are you planning on doing with the business, are you looking to grow it, are there any concerns you have with the business, such as cash flow, are you happy with the amount of time your spending doing your bookkeeping. Then the ultimate question, what do you want to achieve from our relationship? This would give me an idea of what you were looking for, how I could help you and if it was something I could include in an overall package such as within your end of year financial preparation or as additional advice. Is that what you meant by how?

    What benefit your accountant can give you really depends on what you want or need at the time, and what you consider to be valuable. Without an understanding of your business then it’s difficult to give you suggestions.

    Sadly tax law is full of grey areas, leading to interpretation and that’s were you get differing answers to the same questions. I’ve quite conservative myself and if it’s risky I would prefer to not do it. However, there are many out there that are more then happy to risk it.

    Go with your gut, if there not providing good advice, or there style or risk profile is different to yours then have a look around for someone that you might get along with better. You could even ask for a referral on this forum, I’m sure there any many accountants on here that would be more then happy to assist you. Interview them, have a chat with them and see if you get on with them and like what they say and how they do business.

    I understand that $ is a concern. We run a small farm which provides little income, so the initial accounting fees have really stung and killed the bottom line. There are great, but they charge a premium. I always make sure that I get a quote before they start work, and get an indication around how much particular advice may cost if need be. At least then you are both on the same page, and it gives you an opportunity to back out if you need.

    Cheers

    Carrie

    #1165543
    AndyR
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    Luth6322, post: 191797 wrote:
    If i was interviewing you for the first time, I would ask a load of questions like that are you planning on doing with the business, are you looking to grow it, are there any concerns you have with the business, such as cash flow, are you happy with the amount of time your spending doing your bookkeeping. Then the ultimate question, what do you want to achieve from our relationship?

    None of the accountants I have tried have gone into that sort of detail. That sounds basically like what I am hoping for, but I don’t know how to find an accountant who operates like that.

    #1165544
    Road Runner
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    Hi Andy,

    I think you will only begin to get the sort of value you are seeking from an accountant when you get them involved in your business. Until an accountant (or any service provider) knows your business you are just a relatively anonymous customer to them.

    So, step one is to find an accountant willing to get to know you and your business.

    Step two is for you to work out what “value” you are seeking. For example, do you need help preparing a budget? For an accountant to help with your budget preparation requires them to know and understand your business. They have to ask questions and take an interest. Along the way, they may challenge some of your assumptions, or offer an insight into other ways to grow your business.

    Do you keep track of your actual performance against your budget? Do you want an accountant to help you do this in an organised manner?

    Do you need help “looking forward” so as to anticipate cash flow holes, etc? Is this the value you are seeking?

    Do you know the main drivers of cash flow in your business? Do you keep a track of these on a regular basis? Do you understand the relationship between these drivers of cash flow? Is this the value you are looking for?

    Do you understand how to read and interpret your financial information? Could your accountant help you here? Do you want someone to sit down with you on a monthly basis and discuss the performance of your business to date, the projection for the remainder of the year etc? Does an accountant acting as a type of business coach using your financial information to provide structure to the “coaching” meet your expectation of value?

    I’m not sure how many suburban accounting practices provide these type of services to small business? They are the type of services that I think offer real value to a business owner in that they should help maximise your cash flow, understand your business trajectory and avoid potential problems.

    The sort of stuff I’ve outlined above is usually time consuming to complete (hence may be expensive) unless the accountant is organised and has established a process that helps them provide this info in a cost effective manner.

    I guess what I am trying to say is you need to identify the areas where you want help and then start finding out whether your accountant can help, and if so, on what basis and for how much.

    Hope this is helpful. Good luck with your search for value.

    #1165545
    bluepenguin
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    I had a few horrible accounts (all from referrals) before I finally ended up with one I’m happy with and who really seems to care.

    You need to be careful of those just wanting to make easy money off you, and the ones who want to sign you up to whatever service gives them commissions.

    Certificates and memberships don’t automatically make a person honest or hard-working or even knowledgeable in their field. As well as making sure their qualifications, knowledge and experience are up to scratch, you also need to make sure that you’re dealing with a decent, honest human being who suits you and who wants to invest in your business. If you find the right one, they’ll be well worth the money.

    The problem I found when I started up was the accountants would look at me, all young, wide-eyed and naive, and think to themselves, “this kid’s business is gonna fail in 18 months or so, so I’ll make a quick buck while I can.” And I got severely ripped off.

    I emailed my very first accountant with a quick question, received a 10 minute phone call back which was mainly small talk, and then received an $80 bill for the that call. My question was never answered. So I promptly found a new accountant.

    If you take away the BMW and the initials after their names, finding an accountant is no different to finding a good tradie, designer or fish n chip shop.

    #1165546
    LucasArthur
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    Its an interesting conversation, all i have to add is NEVER BE COMPLACENT.. if you are not happy, move away as a bad accountant can create more problems than good which can affect you long term.

    As our local BluePenguin mentioned, be wary of those that merely want to add all services possible onto your account such as insurance, superannuation management, book keeping, lending referrals (overdrafts etc) and so forth and so forth as they are aiming for the ongoing commissions.. and worse still, they are trying to create you as what is deemed a ‘sticky client’.. Simply meaning it becomes increasingly more difficult for you to step away from them them more hooks they have in you…

    Look forward to reading more suggestions on this thread, especially a good fish and chip shop in our local area ;)

    Cheers
    Jason

    Jason Ramage | Lucas Arthur Pty Ltd | E: [email protected]   P: 61 3 8324 0344    M: 61 412 244 888
    #1165547
    bluepenguin
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    Meadowglen Fish N Chips. Hands down.

    #1165548
    James Millar
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    Hi Andy

    Firstly, I suspect that the experience you have had may have something to do with end of the market you are dealing with. With 20 years’ experience in this sector I can tell you that any accounting firm preparing business financial statements and a compliant company income tax return (with appropriate due diligence and quality) for $1000 is dirt cheap. I have worked in all sectors of the market, from the biggest firms to the smallest and that price point is rock bottom. It may seem like a generalisation but you really do get what you pay for. Attention to detail and the very best knowledge is not cheap.

    Second. There is a massive amount of law that applies to your company – most of which you may never have heard of and are probably not interested in (after all you are running a business not trying to become a tax expert). It can often be hard to quantify, explain and demonstrate the value of A grade accounting and taxation advice (especially the latter). An ATO audit will certainly identify whether your accountant has been doing the right thing by you (we often give clients news they don’t want to hear but they generally appreciate that we are acting in their best interest). They can sleep at night knowing there are no latent tax exposures awaiting detection by the ATO. Suffice to say that if you as a lay person are finding errors then your accountants are incredibly poor (goes back to my point above – that’s the space you’re in at $1000).

    Third. We have three annual fixed fee reporting packages for our small business clients. A basic plan at $1975 (bare minimum items), standard plan at $3150 and premium plan at $4350. All have different inclusions. The basic plan is very limited but will produce compliant outcomes. In addition we offer a pre year end tax planning solution for $850. Within this we review trading performance and related issues before the end of the year and make recommendations accordingly. We actually guarantee clients will be satisfied with (a) the tax optimisation outcomes that may have been foregone and (b) clarity around forthcoming tax liabilities – otherwise the $850 is refunded.

    So in your case for A grade advice from true experts (with accounting, tax and commercial expertise) you would pay anywhere from $1975 upwards. Double what you are currently paying (and possibly three to four times more depending on the level of engagement you desire).

    Cheers
    James

    Helping build better businesses and better lives with expert financial and taxation advice. [email protected] www.360partners.com.au 03 9005 4900
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