What are you looking for in an accountant?
This subject seems to be easily discussed among friends, colleagues and acquaintances and yet the very same answer is agreed on, what is that?
‘ I want to pay less tax to 0.00 tax, in fact I am a hard working person- I am entitled to a refund’
That is such an attractive thought and practice among individuals and business owners. I discuss this with many tax agents and the question I ask them is: ‘what is the second to fourth thing on average that clients say to you?’ We know the first three are usually:
‘Hi my name is… ‘
‘Can you do my tax?’
‘I want to pay no tax and get a refund’
‘If you are a good accountant, you will be able to do this for me’
Am I right? Some of you reading this are having a little giggle as you can easily relate, where as some of you reading this are saying ‘ well, that is correct and that is what a tax accountant should do!!’
Yes of course, we all agree. Tax accountants should be able to advise you of the best ways that you can maximise your earnings and your profits, diversify to expand your business offering and retire knowing that you are well taken care of financially- do you agree?
Let’s delve onto the things you need to know about accountants:
What is the role of accountants
Accountants come in different form as you see in mechanics, the only difference we accountants are administrators.
Some of us have the knowledge and skills, some have minimal skills and knowledge and some have knowledge and no skills. You need to ensure your accountant has the professional care factor for your business and your tax affairs when it comes to meeting your tax obligations.
Why? Because it can come back and bite you!
How? Keep reading …
The Role:
Management accountants/ Financial Accountants
Management/ Financial accountants look after your business accounts in terms of forecasting, budgets and projections. They analyse your past and project your business future financial forecast, however, note that these need to be as realistic as possible considering the market, the economy and the demands of your product and services. When we analyse your current financials we are able to advise you of how you are performing vs your industry average and we work together to monitoring you ongoing business performance. Usually this is done monthly.
Bookkeepers
Bookkeepers will complete your day to day transactions and ensure you are up to date with your reporting requirements. They will provide all that you need in house from A-X, where as Y is for your management/ financial accountant for budgets and forecasts and X is left to the Tax accountant for your yearly tax reporting.
Note the some bookkeepers are also qualified accountants that are able to complete all tasks of Y= management accountants. They have the knowledge, skills, memberships and insurances. Be sure to ask.
BAS Agents
Must be registered and licensed with the Tax Practioners Board (TPB).
BAS Agents perform the role of bookkeepers, however, note that BAS agents are able to advise you regarding your Tax obligations for GST, Payroll Tax, Superannuation, PAYG Withholding, Wine Equalisation Tax, Fringe Benefits Tax and Other statutory reporting for your business except for Income Tax.
Some BAS agents can also provide your Y.
Tax Agents/ Tax accountants
Must be registered and licensed with the Tax Practioners Board (TPB).
Tax Agents can do all that BAS agents can do with the additional licence to lodge your income Tax return.
Tax Agents/ Tax Accountants can also provide your Y.
The reality of accountants
Just like any industry, we have the good, bad and the regretful few, however, as accountants we have obligations and the requirements have only become stricter.
Did you know that you are the person signing the documentation, lodgement forms and it is your responsibility to maintain your documents, receipts and correspondence? The tax agent is telling you in these engagement forms that they lodge according to the information you provide.
Of course, you have rights and that is why it is best to get the right tax advise and the knowledge and understanding of your requirements from the right agent.
Why am I stressing this? Because many individuals and business owners are not informed. We have a general understanding that when we hire a professional we are safe, just like hiring a lawyer. Is the lawyer working with enough experience under their belt? Have they assessed the situation to advise me well? Do I really have a case? Etc. etc.
What to watch out for
Watch out for accountants that promise you refunds or no tax payment without thoroughly looking over your books.
Watch out for accountants that ask you what you want to declare in income and expenses vs the reality of your transactions.
Why do some tax accountants work oustside of this?
I don’t have the answer to that, just like anything we can look at the egg shell from many perspectives and see flaws- make assumptions and yet the reality may be different.
Let us not judge but let us be informed.
Take aways
Look for an accountant that can help you grow, develop the right legal strategies with ASIC and the ATO for financial reporting, cashflow, and liabilities.
Tax planning is what you seek to get the best result regarding your net profit and your tax payable. Isn’t this the reason you work so hard for your income whether you are an individual or a business owner. Know your obligations, have your agent explain it to you and not tell you
Ensure, ensure, ensure the BAS agent and Tax agent are licensed and registered with the Tax Practitioners Board. Here is the link: https://myprofile.tpb.gov.au/public-register/
Know the basic difference of the benefits you get from different roles accountants are legally able to give you.