When choosing an accountant, look for one that will suit you or your business. Some accountants specialise in tax returns for individuals or companies in a particular industry, and others are experts in a particular area of tax.
Once you’ve decided it’s time to hire an accountant, the next step is to choose which accountant to hire.
It’s essential to take the time to do this carefully, and there are a few things you’ll want to consider first. You’ll need to think about issues such as the accountant’s location, the division of workload and the type of accounting software you’ll use. Consider how much you’ll have to pay the accountant and whether they can help to reduce your business taxes.
It’s in your company’s best interests to have an experienced, capable person handling one of the most critical areas of your business – your finances. The right person will save you time and money year after year. So here are some things you should consider when you’re choosing an accountant.
When it comes to business, we think that no truer words have been spoken.
Accounting is a vital part of the business.
And as accountants ourselves, we here at EWM Accountants can’t emphasise enough how important it is to have the right accounting team behind you.
We’ve got you covered – here’s a rundown of all the essential factors that you need to consider when it comes to choosing the right accountant in Melbourne to help create a fruitful and successful business.
When tax season comes around, almost 70% of the population trust professionals to handle their tax return. This is often done for convenience, advice, better refunds or the simple peace of mind that everything was done right the first time with no issues. However, not everyone is familiar with tax accountants in Australia.
Turning to a registered tax agent to handle your taxes each year can help you maximise your tax return. Not everyone is familiar with the specific tax deductions they can claim or what taxes they should be paying, which can lead to them overpaying or underpaying, both of which could lead to serious issues.
Aside from ensuring that you lodge a tax return properly each year, professionals can also help you when your finances have become more complex. Our friendly tax accountants can give you tax and budgeting advice to help you manage your finances.
How you can choose the right accountant for your business?
If you run your own business, an accountant can help you set up and maintain your financial records. They can also help you meet your tax obligations.
The right accountant can also offer advice and guidance on your accounts as your business grows.
They can help with:
When it comes to your accounting needs, you need to make sure you work with a team who possess and demonstrate the requisite knowledge, skills, and experience.
You need an accountant who is qualified to do the work ahead, no matter how tough or busy it gets!
If you’re thinking of growing your business, you need someone who will be able to help you maximise your potential.
When talking about qualifications, it’s important to understand what each qualification means.
While there’s overlap, different certifying bodies have different focuses and prerequisites. This directly affects the types of service your Melbourne accountant can offer.
There are three widely-recognised accounting bodies in Australia:
Chartered Accountant (CA)
Certified Practicing Accountant (CPA)
Institute of Public Accountants (IPA)
On top of registering with a recognised industry body, certain niche areas of accounting also have their professional bodies. While these aren’t mandatory, they do tell you about your accountant’s specialisation.
Accounting can be complicated, and you won’t always be able to make sense of your numbers and figures.
Sometimes, you need someone to walk you through what the reports mean. And for that, nothing beats the immediacy of a face-to-face conversation (whether that’s in-person or online).
You might be the kind of person who prefers a face-to-face chat, and if you are, you must look at the location of your potential new accountant.
All else being equal, you might also focus on an accountant who’s nearby.
On its own, location isn’t a big make-or-break factor – it’s all based on your personal preferences.
First, let’s take a look at the definition of an accountant. In both Australia and New Zealand, the title of an accountant is not regulated, which means anyone can call themselves an accountant irrespective of their educational or professional qualifications.
A key difference is whether the practitioner can prepare and lodge income tax returns. An accountant must be a Registered Tax Agent and belong to a professional association such as Institute of Public Accountants (IPA), Certified Practising Accountants Australia (CPAA), the Institute of Chartered Accountants of Australia (ICAA), or the New Zealand Institute of Chartered Accountants (NZICA).
No one wants to be someone’s second priority.
And with the number of clients your accountant works with, how can you be sure your small business, tax return, or superannuation is getting the attention it deserves?
This is certainly something that you should think of when choosing an accountant. Unfortunately, it’s also difficult to gauge.
Do you feel like you aren’t getting the attention you need? That you’re their second priority? Does your accountant struggle to provide your numbers and fail to remember details?
It’s important to choose someone who not only looks out for your best interest but also someone who makes time for you and your accounting needs.
As accounting can be tricky and complicated, you need someone who can take time to acquaint themselves with your situation. You want somebody who communicates and keeps you in the loop regarding your accounting.
When you speak with a prospective accounting firm, ask about their current clients. Have they dealt with businesses (or individuals) that are similar to you? Ideally, you want to find an accounting firm that is familiar with your industry or individual situation, as this means they will have the experience necessary to provide you with the right advice.
For example, different industries have differing ‘standards’ regarding what you can claim on your tax return. Therefore, if your accountant has a strong understanding of the industry, they are better positioned to maximise your return.
Accountants can do much more than sign off on year-end reports and prepare tax returns. They help businesses with cash flow analysis, finance applications and succession planning, Triffit said.
“Real-time reporting and access to software that is now available via cloud-based applications mean that your accountant can be involved in all the financial aspects of your business on a real-time basis,” Triffit said.
You’ll need someone with experience preparing tax returns and financial documents for companies of a similar size and revenue to yours. If your company uses cloud-based software for much of its business, you’ll probably want someone savvy with cloud computing.
It’s even better if they’ve worked with companies in similar market sectors to yours, as that will help them understand the unique needs of your business. You might want to check to see if they have larger clients. If they do, it’s a good sign as you’ll know they should be able to handle your growing needs over time.
You could also ask them for a client list that details each company’s gross revenue and the number of employees. Find out how their clients have grown and developed over the years, to get a sense of whether they’ll be able to handle the evolving needs of your company.
Fees are an important consideration – after all, your accountant’s fees need to fit in with your business or personal budget.
Most firms calculate their fees in one of two ways – either per hour or at a fixed rate. How fees are calculated and the overall amount charged depends on the firm, so make sure you clarify how much everything is going to cost before agreeing to move forward.
It’s important to talk to some of your prospective accountant’s clients before you sign on the dotted line. There are professional services you can use to help you with this, but if the accountant is genuine, it’s likely they’ll be willing to give you a selection of contacts for references.
This will help confirm some of the information the accountant has provided to you. It will also enable you to hear first-hand about the relationship the accountant has with their other clients.
Be sensible when you contact referees. Don’t weigh them down with dozens of written questions to answer. A ten-minute telephone call is likely to tell you far more about your prospective accountant than a three-page form full of bland written answers.
There is a general consensus that practitioners need to possess a high level of knowledge in accounting and business software to ensure clients obtain the most from their software packages. The level of technical knowledge has risen as conventional tasks such as data entry into a general ledger have given way to analysis, reporting and advice.
“I believe all accountants should have at minimum basic knowledge of cloud accounting related software and how their clients can use it. The leading accountants in the future will be able to quickly design a combination of cloud accounting and business software tools and link them together to create exactly what their client needs,” Munro said.
No matter how good an accountant’s reputation or image is, if you aren’t able to establish rapport or some sort of connection, you might find yourself at a disadvantage.
That’s because you’re going to be working with your accountant for a long time.
A strong client-accountant relationship that stands the test of time requires:
In short, it is, in fact, about more than just the numbers!
As your accounting requirements are very important, see to it that whoever’s handling your books is someone you can see yourself working with for an extended period.
If you are constantly switching from one accountant to another, then this can cause some sort of disruption to your accounting records and activities.
Some accountants will do little more than manage your accounts and complete your tax return forms, but the best accountants are more proactive. So before choosing an accountant, ask what they could suggest saving your business money.
For example, what proportion of your operating costs do they think you can offset against tax? If you’re a sole trader or consultant, can you offset a percentage of your phone bill, car costs, maybe even rent or mortgage payments? What are the implications of doing so? The accountant should warn you of any pitfalls. For example, using your home as business premises could result in a tax charge levied on the house when you sell it!
Always bear in mind that in most countries, there is a big difference between tax avoidance (usually legal) and tax evasion (usually illegal). You need an accountant who knows the details of tax law so well that they’ll save you money in legal ways, but not one who takes things too far and risks causing your business to operate illegally.
Be very careful about this, because ultimately it’s you, the business owner, who’ll pay the penalty if the law is broken.
Working with a tax professional for your tax return in Australia can be an excellent decision if you choose the right one. With the nature and complexities of the job, it’s important to find an agent that’s experienced and trustworthy. Fortunately, you can do so by asking the right questions.
When hiring an accountant, remember that they’ll have access to sensitive information regarding your finances. Therefore, you must partner with one of the most trustworthy accounting firms Melbourne has to offer.
Gut instinct also plays a part; you should choose someone that you like. After all, matters of finance are dry enough as it is – the last thing you need is an accountant that can’t even crack a smile!
If all of this sounds more like a marriage than a business relationship, there’s a good reason for that! Your accountant will become intimately involved with the operation of your company, so it’s not a decision to be taken lightly. You will need one you can trust, who has the necessary experience and who will be there when you need them.
Good accountants help companies grow by managing complex financial work and offering advice on practical business issues. This will be guaranteed to save you money in the short and long term. The best ones will be your partner in all but name – and as long as you choose wisely, you can’t go wrong.
THIS WEBSITE CONTAINS GENERAL ADVICE ONLY AND IS NOT PERSONAL FINANCIAL OR INVESTMENT ADVICE. ALSO, CHANGES IN LEGISLATION MAY OCCUR FREQUENTLY. WE RECOMMEND THAT OUR FORMAL ADVICE BE OBTAINED BEFORE ACTING ON THE BASIS OF THIS INFORMATION. INFORMATION CONTAINED HEREIN HAS BEEN SECURED FROM SOURCES EWM ACCOUNTANTS & BUSINESS ADVISORS BELIEVES ARE RELIABLE, BUT MAKE NO REPRESENTATIONS OR WARRANTIES AS TO THE ACCURACY OF SUCH INFORMATION AND ACCEPT NO LIABILITY. WE SUGGEST THAT YOU CONSULT WITH A TAX ADVISOR, CPA, FINANCIAL ADVISOR, ATTORNEY, ACCOUNTANT, AND ANY OTHER PROFESSIONAL THAT CAN HELP YOU TO UNDERSTAND AND ASSESS THE RISKS ASSOCIATED WITH ANY INVESTMENT.
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