How to get the most value out of your accountant

Do you see your accountant as a tax or a business advisor?  Contrary to popular belief, they are two very different sets of expertise. Some accountants can help in both areas, but they will usually specialise in one or the other (i.e., good tax advice should not be mistaken for good business advice).  If your accountant is just a tax guru, then they may have another advisor in the firm who can help you with your business management advice.

Many businesses expect an accountant to be the answer to all their problems, yet end up receiving no real value at all. If you’re looking to get more value out of your accounting firm, there are certain steps you can take to improve the quality of the service you receive:

Know your information

Prior to seeking advice from your accountant, you should be up to date with your financials.  It is hard for your accountant or advisor to give any informed advice when you do not know your numbers or how you are currently sitting financially.  Informed business decisions only occur on the back of accurate information.

Whether the discussion with your accountant is about advice or how to deal with a current bad business situation, knowing your numbers helps with your confidence in the discussion.

Establish a schedule

How often you see your accountant really is a personal choice and many factors can come into play. To figure out what’s the best frequency for your business, ask yourself the following questions:

  • Have you newly entered running a business from being an employee? If yes, it is better to see the accountant more than less. You’ll need frequent contact with an accountant at this transitionary stage, as the advice you are given will only be as good as the quality of information they receive.
  • How much experience or understanding do you have about the financial side of running a business? Does your accountant give you help and clarity here?
  • Do you see your accountant as your business mentor?
  • Is your accountant your butt-kicker when it comes to reminding you about the importance of being up to date with all financial responsibilities of running a business?
  • Does your accountant submit your BAS or tax returns for the business? If so, then you should visit them monthly or quarterly. Visits are also required twice per year for a pre- and annual tax review, although this could be tied in with BAS visits.

Depending on your business size or level of advice required, as a minimum you should see your accountant twice a year. You’ll want one appointment for an end of financial year tax planning session. If you are in Australia, this would be in March, April or May.  This will establish how the business is performing as well as help estimate tax liabilities and returns due in the next financial year.  The other appointment for the pre-tax planning should be arranged at the halfway mark of the year to ensure you’re not missing anything. You will also need to see the accountant to sign off on the tax year once it has ended, although most of the checking can be done using online accounting software.

Prepare for tax time

To save time, when seeing your accountant for the pre-end of financial year tax planning, it’s good to be prepared. Before your meeting, confirm the following:

  • All accounts for each enterprise are fully reconciled and up to date.
  • A budget projection is complete for the remainder of the financial year (this assists with tax planning).
  • A budget for the next financial year has been completed or is well and truly underway.
  • All super contributions for the current year have been paid.
  • Payroll Tax contributions are up to date or the expected liability is known.
  • The asset and/or stock registers are up to date. All assets made in the current financial year need to have supporting documents.
  • You have documentation for any new loans commenced in that financial year.
  • Your list of outstanding debtors and creditors to review.
  • Bring a list of possible bad debtors to review.

When it comes to tax, it’s important to do your research first.  It is much easier to participate in a conversation – to challenge thoughts and ideas – if you also know something about the subject.  The Australian Tax Office (ATO) website has a wealth of knowledge.

Here’s a good tip to keep in mind: when using the help function on the ATO website, be very precise about the keywords used to search topics.  If you are too wordy, it will send you down a rabbit warren and you may give up.

If you’d like help simplifying the relationship with your accountant, why not try out REEP? REEP uses real, constantly updated data to create forecasts and reports for your small business you can easily share with others.