Friday 17 April 2015

A Good Accountant Is Money Well Spent

I was surprised to read this week that less than 10% of small businesses call their accountant a "trusted advisor" and it raises the question if that statistic applies to QVM traders as well. Apparently Accountants, Lawyers, and Bank Managers have all slipped in status and small businesses owners are becoming more reliant on suppliers, customers and internet searches for their advice.

In the case of accountants, the shift is probably consistent with the standardisation of many accounting processes including computer programs like MYOB but there are many services an Accountant can provide that go well beyond computer programs. A good Accountant will be a lot more than just a book keeper or a tax minimiser. A wholistic approach to business management and finances in general can be very beneficial to a business owner.

Some years ago I moved from my long term Accountant to a local accounting firm, partly because they were closer, and partly because their fees were significantly cheaper. There wasn't much all round business advice but my books were up to date and everything was going ok until the tax department asked to do an audit on my business. They were questioning how I was surviving on such a low income - this was 2008/09 and the GFC was really impacting. I contacted my local accounting firm for advice on how to handle the approach from the ATO only to be told that "that is something between you and the taxation department". That wasn't quite the response I was looking for. My new accountant was good at keeping books but not so good on business advice.

I then rang my old Accountant and explained my predicament. He asked to see my accounts for the time since I had left him and immediately contacted the ATO by phone. He then followed up with a detailed letter on my financial situation including the impact of the GFC on retailing. The audit never took place. Needless to say I took my business back to my old Accountant with humble apologies for ever leaving him in the first place. I am now paying higher fees, but not complaining. And I receive good advice, not just on how to operate my business in tough times, but how to prepare for the future.

I will never forget one of my first meetings with this Accountant some 30 years ago. We had just completed the year's accounts and I said "How do the figures look?" He replied "How do you want them to look?"  That cheeky response belied a very professional approach to accounting but left me in no doubt that my interests were in good hands. If you don't have a good accountant I recommend you get one. Someone who wants to look after your affairs may cost a little more, but it is money well spent.

- Greg Smith 17/4/2015