When starting out in business for the first time, it's vital that you secure the best possible local professionals you can find to help guide you along the way. In particular, the most important adviser by far is your accountant. This article covers how much you should be spending on accountancy services and some guidelines on how to find the best local accountant out there.
Look after the finances: your accountant
If you're in business then don't do the taxes yourself because a good accountant will help you put your tax deductions in the right place. Your chances of being audited will be a lot lower and a good accountant will lower your tax bill enough to cover their fees, so they end up costing you next to nothing.
- A great accountant will listen to your business plans and will help you maximise the opportunities outlined in your plan regarding income, expenses, profit and tax issues.
- A good accountant will at least make sure that you are paying as little tax as possible without breaking any tax laws.
- A poor accountant will just process your tax returns without trying to help you develop your business.
How much should accountancy cost?
Good advice generally costs money, but you should be paying no more than 1% of annual turnover for your accountancy services, assuming your
accountant does your annual financial reports and monthly/bi-monthly regular tax returns.
How to find the best accountant
A recommendation from a credible source is by far the best way.
My advice is not to just take a name out of the Yellow Pages or similar directory, I did that once and had a horrendous experience 12 months down the track.
Start by asking people in your existing network. If your network doesn't include anyone who uses an accountant or a lawyer etc, ask your contacts to ask around on your behalf.
You could join a local business network and ask other business owners for their recommendations.
Another method is to join LinkedIn.com, a business people's social network, make your network online and then ask your question. Replies will come back to you from 2nd level and 3rd level contacts very quickly.
If all that fails, contact your local Government Business or Trade department and ask them for recommendations.
Select 3 or 4 accountant companies for your shortlist - choose the accountants that responded quickly to your request and that understood your business. Also important is whether their fees are within your budget.
Then arrange meetings with them all. When you meet with them find out if they will work directly on your account or if it is handled by an employee. Other important questions: Will they advise you on an audit, your ownership structure, and provide assistance with analysis of your financial statements?
Your final choice will normally be down to whether they seem approachable and professional enough for you.