IT seems we drop off our records at the end of each financial year and then some time down the track we receive a bulky set of financial statements, our tax returns, an estimate of the tax either payable or refundable and finally an accounting bill that seems high.
Many also pass the comment that “we don’t seem to get any proactive business advice unless we ask a specific question”.
Finding a solution to this apparent mismatch of expectations should perhaps start with being as clear as we can about what we want from an accountant before we appoint them.
To illustrate my point, before buying a new tractor or 4WD or bull, we would have a pretty good idea of what we were looking for, what capabilities were required and what we expected to pay before making the purchase. We would then examine their specifications and ask as many questions as needed to satisfy ourselves that we were making a wise choice. Similarly, we should establish these parameters before appointing an accountant.
As a starting point think about some answers to the following questions.
Am I looking for a general-purpose accountant who can cover business strategies, financial planning and detailed tax advice? Do they also need to prepare financial statements, tax returns and business activity statements? If the answer here is yes, and it is a small firm where all this is coming essentially from one person, it might be difficult for them to be really skilled at all these things. Having said that we might have a strong personal relationship with them that needs to be considered.
Another model could be to have an accountant who does the tax advice and compliance work well, and then also have other specialists advising on financial/wealth planning and business and production strategies.
The size and complexity of our operations may help us with answering these questions.
- Do I want an accountant that is in my local town where they are very accessible, or would I prefer them to be in a capital city or bigger regional centre?
- Do I want a small firm with low overheads and lower prices or would I prefer a larger firm with a wider and perhaps deeper range of available services, accepting that their fees are probably going to be a bit higher?
- Getting the most from an accountant is also usually helped by having a good personal relationship with them. So, assuming they have the appropriate skill set, what personal characteristics would I prefer?
In terms of price, remember that we often get what we pay for. If the price seems too high it usually means that our needs aren’t being met and we don’t feel that we are getting value for money. This might mean that our accountant hasn’t delivered what was promised, or that we haven’t communicated what we need or that the relationship is a mismatch. That is, we have bought a quad-bike when we really needed a Landcruiser or visa-versa.
So, what does a good accountant look like? Are they someone who focuses on saving us tax this year above all else, or someone who helps us with long term strategies to create a strong and sustainable business, as well as building wealth? Sometimes these two approaches can result in different strategies. Do they inform and empower you to make educated decisions, being cognisant of the implications of each option?
What is the scope of our accountant’s work? That is, what are they doing for us and what are their core skills that add value to my business? Accountants generally have a very good understanding of the tax laws and how to apply them. They also generally have a very good understanding of a lot of aspects of business and business management.
However, like everyone, there are limits to their skill sets. Therefore, are they comfortable to refer you to someone else when it is not their area of expertise?
Where does our accountant’s work stop and where do other members of our support or professional team (business advisor, lawyer, financial planner) start?
Some of the best client outcomes that I have seen have arisen where professional advisors are able to work collaboratively together in the best interests of their client.
This requires egos to be left at the door with the primary focus being the best long-term outcome for their client. It also adds a real dynamic to meetings when these people are bought together, as each one thinks differently and approaches current situations with a different mindset. They each bring different professional skills, which then hopefully gives us a better overall outcome.
How do we get the most out of an accountant? The first part of this involves answering the questions outlined above and being a good “fit” with our accountant. It also helps to have an agenda for our meetings. This should hopefully allow them to cover what they need to and should also help to ensure that we get all our questions answered. In addition, an agenda, helps our accountant prepare for the meeting in terms of being able to address all our questions and concerns.
How then do we find the right accountant? Be clear about what we are looking for and communicate that. Ask an accountant to communicate to us what they can offer and how they can add value to our businesses. Will they help us build that business and accumulate long term wealth? It also helps to have professional advisors that have genuine expertise in our industry.
- Scott grew up on family grazing properties near Blackall and Stanthorpe. He then completed a business degree externally while working for Incitec as a field agronomist. He worked as an accountant and became a director/partner of firm Power Tynan for 21 years. He is now a partner in Succession Plus. His article first appeared in Bush Agribusiness' newsletter.