How To Handle Your Accountant
Most small business owners make only one trip annually to see their accountant, often with a heavy heart… This trip is perhaps made because there is a compliance issue, either to submit tax returns and /or to present their results to the bank. In other words, the trip is forced upon them.
For many business owners, the annual accounts exercise is not one that they look forward to. It’s right up there with arranging the refuse collection in the order of their priorities. This is unfortunate, given that the purpose of being in business is to maximise profit, and your accountant should be able to help you with this.
The focus of the work that your accountant does for you, should not be about trying to reconstruct history, but about trying to improve the future. Why then is the annual accounts exercise such a tedious one for most people? In Ireland, there is an “accounting pattern” right across the country. For example, many businesses have a year end of 31 December. Those businesses have until the following October 31 to file tax returns or mid-November if they file their tax returns online. Much of the problem with accountant / client relationships stems from poor timing and communication:
- The majority of self employed people leave their accounts until the latest possible moment, with the majority of those with December year-ends not making contact with their accountant until September at the earliest
- This causes M50 (motorway) style “tailbacks” in accountants’ offices across Ireland
- The accountants’ level of service and feedback to clients is compromised by this rush to meet a deadline
- Opportunities to properly review financial results, cash flow, investments, pensions and investments are consequently lost
- Most accountants rewrite the books they are given by their clients, as the books are not in a format suitable to prepare the accounts. Most business people are unaware that this even happens, and they think that they are doing a great job with their books and accounts!
Clearly there is fault on both sides here. Accountants should educate their clients more about what is required from them and emphasise the importance of timing. Clients, (business owners), should be proactive in seeking to improve the quality of their records and to bring their records to their accountants at the earliest possible opportunity.
How to Handle Your Accountant
There is a good accountant out there for everybody. You need to find an accountant who is not only competent and qualified, but also suits you in terms of their thinking and how they communicate with you. Your accountant should be interested in your business and make relevant, useful and practical suggestions for your business. But you need to work with your accountant, to enable him/her to give you the best possible advice. Rocking up to your accountant’s office swinging a bag of invoices in mid October is not likely to give you that result!
The best way to handle your accountant? Keep up to date with your books, find an accountant that you can work with and keep the lines of communication open.
In next month’s post I’ll outline my Top Ten Tips for Managing your Books.
What tips do you have for handling your accountant?