Finding the Right Accountant for Your Business – They’re Not All Alike!

Generally people I speak with understand that not all doctors or lawyers are alike.  Many specialize in only one or two areas such as family medicine, internal medicine or real estate law or commercial law.  Similarly accountants also specialize in a limited number of areas including audit, tax, corporate law, mergers or acquisitions, or even small business accounting!

Consider the following when deciding on the right accountant for your small business:

1.       If you already have an accountant, how often do you see your him/her ? Do you meet with him or her annually?  Quarterly?  Would you appreciate an opportunity to speak with him/her on a monthly basis or only when needed?  When you have reached out to your accountant, how responsive were they?

2.       What do you want your accountant to do for you?

Do you want them to only prepare the year-end financial statements and tax returns, or would you like to receive advice on business issues such as tax planning for future acquisitions, improving the profitability of your business or assist with financing, succession or business plans?

At a minimum, a good accountant for your small business should allow you to save MONEY, save you TIME, and provide you PEACE OF MIND.  Each of these will be discussed in more detail below.

An accountant should be working in the interest of the client to save MONEY.  This effort can take several forms including tax planning to minimize the tax you pay (not to avoid paying tax, because of course this is illegal), maximizing the profits of the business, avoiding tax penalties from inaccurate or late tax filings for payroll, GST/ HST or corporate income tax remittances, or increasing cash flow through management of payables, receivables, or merchant services (a.k.a. credit card processing) fees.  By meeting and discussing the results of your business performance the accountant can help identify areas for reducing cost, improving performance in the short term and plan the course for improving performance in the future.

 Your account should be also working to help reduce the amount of TIME consumed by the client in preparing, delivering, and interpreting the results provided by the accountant.  The accountant can help to introduce record keeping systems to streamline the collection of receipts, invoices, recording of transactions (cheques, automatic deposit/withdrawals), manage payroll calculations and remittances and in some cases pick up and deliver the accounting information for bookkeeping processing on a regular basis.  The accountant should be able to meet with the client on a regular basis to evaluate the performance of the business against pre-established goals for cost containment, profitability and growth or other objectives to allow the owner-manager to adjust throughout the year in order to respond to market conditions or other operational events.

Finally, through the accomplishment of the first two elements above, the accountant should seek to provide PEACE OF MIND to the small business owner.  This should be achieved by providing sound and timely financial advice, avoiding unnecessary interest charges and late filing penalties for payroll and other taxes, open communication regarding business plans and objectives, accurate and complete record keeping including capital and other assets in the business, and through timely and well developed tax planning for business and life events which may include as succession planning, purchase and sale, mergers and acquisitions, changes in shareholder arrangements.

Some small business owners say “I prefer to use a Chartered Accounant (CA)”.  In response I would say that there are several types of qualified parties that may be able to provide the services you require. CA’s are often used when a business requires several type of accounting services such as cross-border tax advice, servicing complex issues related to multi-location, multi- shareholder groups, or when an audit is required by a bank.  If this does not apply to your business, then it may be possible to reduce the fees you pay for accounting and bookkeeping services.  If you are a business owner and sole shareholder, you may only wish to maintain your records for tax purposes.  For this purpose you may only need the services of a bookkeeper for the regular accounting and an accountant for the year-end tax return.  This may be one in the same individual who may or may not be a designated general (CGA) or management accountant (CMA) and may also be able to provide you with tax return preparation and tax planning services based on an intimate understanding of your business gained through the regular bookkeeping performed for your business.

When selecting the accountant for your business, develop a clear understanding of the needs and goals of your business, and an understanding of the qualifications of who exactly will be providing the accounting services - a CA firm partner, manager or intern - and whether this will provide the level of value you receive for the fees that you pay.  Having considered these and the other factors discussed above will position you well to obtain value for service provided, and above all your business success.

Good luck and stay tuned for the next instalment of Small Business Tips!

Regards,

Stephen Beech, MBA CMA
Padgett Business Services
(905)949-4388 ext. 24
http://www.smallbizprosmississauga.ca/

 (c) Stephen Beech 2010