Home – New › Forums › Money matters › This is why you should fork out for a quality accountant
- This topic is empty.
-
AuthorPosts
-
September 13, 2019 at 12:26 am #999744Up::0
I little story about a recent achievement by a skillful senior staff member and why this highlights the importance of selecting the right accountant.
One of our small business clients was randomly selected for a comprehensive ATO tax audit. The audit was part of the ATO’s new tax GAP program to help identify taxpayer under reporting, dodgy tax agents and build intelligence for audit profiling. To be honest it was one of the most comprehensive audits I had seen in 25 years. This client has a few entities with some interaction between them but not crazy large figures and otherwise relatively typical of a small business taxpayer.
The initial documentation request was extensive to say the least. The ATO wanted all receipts, invoices, bank statements, software data, point of sale data, pay slips for staff for several years. Now like most people this client has a busy schedule and the prospect of getting this data together was daunting. Potentially a few weeks work alone which he didn’t have. So this is how our team member solved the problem.
Step 1 – He effectively negotiated a reduction in the initial scope of the audit and documentation. Now persuading a senior ATO audit to start with a lesser data set takes some skill and solid reasoning. Mission accomplished which significantly reduced the time and cost burden on the client.
Step 2 – He kept the auditor informed of progress regularly and ensured the data was provided promptly with clear explanations and robust legal justification for any contentious items. Again this is harder than it may seem because we were dealing with a range of different tax law (income tax, GST and FBT).
Step 3 – Acknowledged a few minor items and on the clients behalf accepted accountability for those. The ATO’s win amounted to about $150 which was written off as immaterial by them.
The most important step not listed above – The work was done well and done correctly in the first place. We tell clients “no” when it will put them at an unacceptable risk. We ensure the appropriate documentation and workpapers are kept by us and the client. We don’t get involved in “dodgy” practices because our value is best demonstrated when the chips are down.
Moral of the story is that protracted random ATO audits do happen. If you don’t do it correctly in the first place and don’t have the right team helping then it can be a painful and potentially costly process.
And here is the final statement by the ATO auditor that we are most proud of
……”Also, as part of tax gap project, earlier this week I was asked to present the case to senior leadership group to disseminate learnings gained. Overall, feedback from the leadership group was very positive for the client as well as your practice which led to correct reporting of income, expenses and tax payable for all the entities examined as part of this audit. Practices like yours help us to draw on your insights and expertise to understand factors positively influencing client behaviours and business practices leading to correct reporting and compliance. Thanks for your co-operation, support and prompt action during this audit process.” – Senior ATO Auditor Sept 2019
Helping build better businesses and better lives with expert financial and taxation advice. [email protected] www.360partners.com.au 03 9005 4900September 13, 2019 at 12:30 am #1221174Up::0Hi James,
Wow. This is a great (and important) read and some excellent tips in there too. Thank you for sharing. Would you be okay with me publishing this on our website today? Under your name of course.
September 13, 2019 at 12:38 am #1221175Up::0Lucy Kippist, post: 267101, member: 98720 wrote:Hi James,Wow. This is a great (and important) read and some excellent tips in there too. Thank you for sharing. Would you be okay with me publishing this on our website today? Under your name of course.
Hi Lucy – yes of course. As accountants the wins and value we provide are not always visible to clients and to receive an ATO endorsement of this nature is very pleasing. My congratulations to our senior team member Huy Tu. He managed the process start to finish and did an exceptional job.
Helping build better businesses and better lives with expert financial and taxation advice. [email protected] www.360partners.com.au 03 9005 4900September 13, 2019 at 1:03 am #1221176September 13, 2019 at 1:15 am #1221177Up::0Lucy Kippist, post: 267104, member: 98720 wrote:Thank you so much and here is the link if you’d like to share it elsewhere too!Great thanks Lucy
Helping build better businesses and better lives with expert financial and taxation advice. [email protected] www.360partners.com.au 03 9005 4900September 13, 2019 at 3:31 am #1221178September 16, 2019 at 9:26 am #1221179Up::0Well done James – and to Huy.
I relate to the post from my own professional perspective – different law/different gov body, but the message is very similar (although, not sure we’d be lucky enough to get such feed back from our gov body!) Am so pleased that you were able to achieve this result for your client AND have the ATO acknowledge the work. Absolutely a good reason to ‘fork out’ for a quality accountant. (well there are many reasons, but your posts cements it nicely).
Congrats to you all for such a positive outcome.
September 16, 2019 at 10:12 pm #1221180Up::0JacquiPryor, post: 267131, member: 20176 wrote:Well done James – and to Huy.I relate to the post from my own professional perspective – different law/different gov body, but the message is very similar (although, not sure we’d be lucky enough to get such feed back from our gov body!) Am so pleased that you were able to achieve this result for your client AND have the ATO acknowledge the work. Absolutely a good reason to ‘fork out’ for a quality accountant. (well there are many reasons, but your posts cements it nicely).
Congrats to you all for such a positive outcome.
I think you’re right Jacqui. We live in a world where people have access to abundant information but the reality is the information is useless if you don’t correctly understand and apply it.
I read a great quote recently that I think sums it up well
……Information is not knowledge. The only source of knowledge is experience..
– Albert Einstein
Helping build better businesses and better lives with expert financial and taxation advice. [email protected] www.360partners.com.au 03 9005 4900September 16, 2019 at 11:24 pm #1221181Up::0Could not agree more James!
I’m sure you hear it as often as I do… “why should I pay you when I can just do it myself…” your post sums it up nicely!
September 17, 2019 at 5:13 am #1221182Up::0JacquiPryor, post: 267133, member: 20176 wrote:Could not agree more James!I’m sure you hear it as often as I do… “why should I pay you when I can just do it myself…” your post sums it up nicely!
[USER=20176]@JacquiPryor[/USER] and [USER=5318]@JamesMillar[/USER] I think you know I respect both of your advise, and opinions, and don’t often disagree, but this is one instance where I am going to throw in an alternate real life experience of why sometimes doing it yourself is better, in the understanding it’s not just me, but a large number of my clients (I have a lot of small business clients), have taken back on the role of Book keeping, because of unreliability and just pure lack of care / quality, I don’t know what to call it maybe it comes back to training or lack of standards.
In my case I was getting my book keeping down by a ”qualified” book keeper, and I knew her back ground really well (long story, to long really), and would just go to the accountant for the end of year tax stuff (technical term James). This went on for a few years, and I never questioned why my accounting fee’s were what I considered a little high, as I was paying for a good accountant.
Well at one point I had reason to severe my relationship with the book keeper (Literally, but thats another story), and decided to take on the book keeping role myself, but still going to the accountant at the end of year. Well that year my accounting fee’s dropped significantly to the point I had to ask why? The answer came back as a question, did I change book keepers, yes I reply, and the response was because they didnt have to fix up so many errors and the only thing he had to do was a few minor adjustments (because I had no idea how to do them), and that I was also going to get some money back from Mr Tax man, because a lot of those errors were in his favour.
So your antidote sounds great, but it all comes down to the calibre of the people we contract these services out to. And the problem is the average small business person has great difficulty knowing who to contract it out to, without already being an expert in the relevant field be it Trademarks, accounting, SEO, etc, and we shouldnt have to be. I would think this client was lucky that they were dealing with Jame’s’s company, but could the same be said if they were employing zyx accounting.
September 17, 2019 at 5:30 am #1221183Up::0Hi Bert,
Absolutely and believe it or not I do agree. I like to think (hope?) situations like yours are the exception rather than the norm. Of course the person we ultimately engage will play a big part in outcomes etc. Education is key in my view and you’re right, as small businesses owners we shouldn’t have to be an expert in everything but finding the right person can be difficult. Often you simply don’t know what you don’t know so it’s difficult to know what to look for then!
I think we should all do our homework before engaging professional services businesses, absolutely. We should know (and be able to trust) we’re hiring the right person for the job. For me my homework includes:
- Checking business / company name registrations to be sure they’re trading as required; that they have an ABN and all those things – and also from there, length of time in business;
- Checking reviews and similar on the business and/or person.
- Checking references if its the sort of profession where one would have references
- Checking to ensure they are registered/qualified if in a profession that requires registration (checking relevant databases or with relevant industry boards etc)
- Testing the service if possible before committing to ongoing contracts or work
Unfortunately I think there are going to be bad apples in every field, and it probably comes from a variety of things – lack of care, lack of training, lack of standards, lack of experience and even that they themselves don’t realise they don’t know what they don’t know. I fight an uphill battle daily in my industry in trying to ‘educate’ people as to the fact Trade Mark Law is specialised. For example, we communicate often with solicitors (noting I am not a solicitor) who operate general practices and then get involved in TM disputes, when frankly sometimes they just shouldn’t. It’s very difficult to get clients/consumers to understand that a solicitor doesn’t necessarily know everything about every law so sometimes you do need someone with experience in that particular area. Kind of like if you need surgery you see a surgeon rather than a GP.
In my example it’s a combination I think of lack of experience and lack of training, as they’ve not necessarily done a lot of study in the IP field, let alone have a lot of experience. I then wonder if that amounts to a lack of standard? Should they be telling a client they can assist simply because they’re a lawyer and allowed to – or, should they be advising the client that it’s in the best interests to look for someone that specialises in the field?
September 17, 2019 at 5:44 am #1221184Up::0bb1, post: 267143, member: 53375 wrote:[USER=20176]@JacquiPryor[/USER] and [USER=5318]@JamesMillar[/USER] I think you know I respect both of your advise, and opinions, and don’t often disagree, but this is one instance where I am going to throw in an alternate real life experience of why sometimes doing it yourself is better, in the understanding it’s not just me, but a large number of my clients (I have a lot of small business clients), have taken back on the role of Book keeping, because of unreliability and just pure lack of care / quality, I don’t know what to call it maybe it comes back to training or lack of standards.In my case I was getting my book keeping down by a ”qualified” book keeper, and I knew her back ground really well (long story, to long really), and would just go to the accountant for the end of year tax stuff (technical term James). This went on for a few years, and I never questioned why my accounting fee’s were what I considered a little high, as I was paying for a good accountant.
Well at one point I had reason to severe my relationship with the book keeper (Literally, but thats another story), and decided to take on the book keeping role myself, but still going to the accountant at the end of year. Well that year my accounting fee’s dropped significantly to the point I had to ask why? The answer came back as a question, did I change book keepers, yes I reply, and the response was because they didnt have to fix up so many errors and the only thing he had to do was a few minor adjustments (because I had no idea how to do them), and that I was also going to get some money back from Mr Tax man, because a lot of those errors were in his favour.
So your antidote sounds great, but it all comes down to the calibre of the people we contract these services out to. And the problem is the average small business person has great difficulty knowing who to contract it out to, without already being an expert in the relevant field be it Trademarks, accounting, SEO, etc, and we shouldnt have to be. I would think this client was lucky that they were dealing with Jame’s’s company, but could the same be said if they were employing zyx accounting.
Bert I agree with you 100% on this. The perennial dilemma with hiring anyone for anything is as a layperson, how do you accurately evaluate the “quality” or capabilities of the person you are hiring. Being cynical the first thing is – don’t just take their word for it.
In the case of professional accountants, if you asked me to guess based on anecdotal evidence from clients we have taken on – something in the order of a third to a half would have been receiving substandard technical advice based on our standards. In some cases with significant implications. Many of these were paying what I would consider decent fees and deserved better.
I don’t know how to resolve that dilemma. There are new websites like “Adviser Ratings” but I tend to take these things with a grain of salt because most review systems are easy enough to game (Trip Advisor?).
That’s why we were quite happy to receive this ATO endorsement in writing (and shamelessly publish it). It’s probably the best measure I can think of because demonstrates how satisfied our primary tax regulator is with the quality of our work. Ultimately if we don’t satisfy them our clients are in trouble.
Let’s find a solution to this problem because it is a big one. A method of distinguishing the good from the bad would actually help my business a lot.
Helping build better businesses and better lives with expert financial and taxation advice. [email protected] www.360partners.com.au 03 9005 4900September 17, 2019 at 10:47 am #1221185Up::0JamesMillar, post: 267146, member: 5318 wrote:Let’s find a solution to this problem because it is a big one. A method of distinguishing the good from the bad would actually help my business a lot.The million dollar question, although everyone carry’s on about getting good reviews, we know they are gamed as you say. People carry on about testimonials, but again, only the good one’s are ever published or passed on to potential clients.
Using my example above, I would have recommended this book keeper to anyone, because she seemed ok. But not until I went to the accountant afterwards did I know she was dodgy as.
As for Jacqui’s comment that it is hopefully not the norm, if I go by what my clients are doing I would say it is the norm. Sorry not picking on book keepers it is across a heap of professions, even gardeners or ex IT/project manager people.
September 17, 2019 at 10:57 am #1221186Up::0No offence taken. Mediocrity is rife in the business world and the accounting industry is no different. Some may say the arrogance and hubris of certain elements of the financial advisory sector make it that much more damning…….cough cough did someone say financial planning royal commission.
Helping build better businesses and better lives with expert financial and taxation advice. [email protected] www.360partners.com.au 03 9005 4900September 18, 2019 at 8:10 am #1221187Up::0Definitely the million dollar question.
It’s a shame to think this is becoming the normal across different/any/all industries as that starts making it acceptable, which it shouldn’t ever be.
Like James, a method that distinguishes the good/bad would be great for my business
How we find that solution and/or education the masses on that I’m stumped and wish there was an easy answer. -
AuthorPosts
- You must be logged in to reply to this topic.
