Small business tax accountants – how to find the best?

Small Business Tax Accountants

For any SMB being able to find quality small business tax accountants can be a very painstaking process. The difference a quality accountant can make on your business however can be substantial. One should view an accountant much in the same way you might view advertising – from a Return on Investment perspective. By that I mean the accountant should clearly show the money saved through applying their advice offset against their fees.

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The challenge is how to find a quality accountant – one that you can really trust will deliver on your expectations. What follows are some simple pointers to make this an easier process for you. Before we did in to that I want to provide some insights into the importance of accountants for the SMB sector in Australia.

Why Accountants Matter So Much for SMBs in Australia

The NAB released a great report based on a survey of SMBs and Accountants in 2018 that focussed on the relevance of accountants to SMBs. Specifically they found that SMB’s rated accountants as the most important professional service provider for a small business. Furthermore the report identified that 90% of SMBs have relied on accounting services at some point in the duration of their small business lifetime. Yet business owners still ask “should I get an accountant for my small business”.

Interestingly over 20% of SMBs felt that an accountant could play a bigger role in their business strategy acting as a trusted advisor, although Accountants that were surveyed that same question only 9% believed that was a need for their clients!

Does Location of the accountant matter?

In a pre COVID-19 world the location of your accountant mattered considerably due to the need for occasional in person meetings. In a post COVID-19 world this is less relevant to a degree but I think location does still matter. Particularly if you are not office bound you might want to consider an accountant that is nearer to your home as opposed to your office. That said with the significant adoption of online meeting technologies like Zoom and Microsoft Teams in addition to online document signing software like Docusign the need is much less.

Does my small business need a CPA?

Insist on choosing a chartered or certified public accountant (CPA) – these are industry body qualifications. These prove the accountant you are choosing has the necessary level of industry, academic and practical experience so is more likely to be able to add value from the start. Of course not all tasks an accountant will perform such as bookkeeping, basic cash flow analysis, tax preparation and financial management willrequire someone of this level of expertise. For these tasks you can ask someone else in the accounting company to take care of it. This will result in a lower hourly rate charged.

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Has the accountant worked with similar companies?

When evaluating small business tax accountants its important to understand if they have experience with companies similar to yours. Specifically ask them what the average turnover is of companies they work with. Additionally advice can be very specific to the industry category so you are going to want to be assured they have worked with similar types of businesses to yours so you can maximise tax effectiveness.

Can the accounting firm service your needs as your business grows?

You should also ask them for a client list and understanding of how their clients turnover has grown over time. The reason is you want to know that as your business grows that they can continue to handles your needs as well. If they can’t demonstrate this then that might be a warning sign. Like anything there is a cost associated with having to switch accountants down the track, and this accountant is going to become very familiar with your business so think of it as a long term partnership.

Ask for reccomendations but dont rely on Google Reviews – try Linkedin instead

When it comes to small business accounting, it will pay dividend for you to seek the opinion of other business owners you know and trust in your industry. Additionally you may already be a member of SMB advisory bodies such as the Australian Chamber of Commerce and Industry. These can be a great point to seek the opinion of others. I do not however recommend relying on Google Reviews when it comes to selecting a small business tax accountant. 

The reasons per the above point is that advice is going to be really specialised generally to your industry vertical/market sector. Google reviews will often be general in nature as most businesses don’t want to publicly display their support for a business like an accountant. Why? Due to the confidential nature of the work that might be performed for them by the accountant. If they do post a review its going to be very basic in nature. If you work in professional services, then the B2B platform Linkedin can be an excellent and efficient way to source recommendations specifically if you have a large network. Simply post the question and see what recommendations you get.

Understand Communication & Costing & Negotiate

For a time poor small business owner its critical to understand what are the realistic expectations of communication with their accountant and how this relates to fees. Small business tax accountants may offer a fixed fee which includes communication (with guidelines) as opposed to a pay by the hour approach which can also be common. Being clear on what you will pay for communication with your accountant needs to be factored in. Ask for very clear directions on what is included in the services (if it is a fixed fee approach for example) and what would be additional.

Think of it like seeing a mechanic and being told the price for a standard service but then they find another issue. You would have to pay more for that much like an accountant who discovers unknown requirements after they start working with you.

Also ask for an hourly rate for differrent types of additional work that might commonly arise with businesses like yours. This is a completely reasonable ask and a good way to know what you might be faced with. Do not take the rate on face value they provide. Always negotiate as even small savings in hourly rate when multiplied across possibly hundred of hours of work over the years will reap significant savings.

Know the accountants preferred software

One massive timesaver in selecting a small business tax accountant is to understand what accounting and tax software they use. Make sure to confirm its compatible with the bookeeping software you are using. This is going to save administrative headaches down the track and allow yourself or your admin person not to have to generate any additional processes that will cost them time.

For example needing to export excel files etc which can lead to costly errors down the track. Its reasonable to ask the accountant to use the same software that you use if this becomes your only stumbling block in selecting the accountant. If they want your business, then using multiple types of software should not be an issue. Also make sure the software is cloud based its going to make access and file sharing so much easier.

What does an Accountant Do For Small Business – Consider Value Added Services

For many time poor SMBs they may not be aware of the evolving role small business tax accountants can play that will save time and reduce need for seeking an additional external advisors. I mentioned a report above provided by NAB that surveyed accountants and SMBs in 2018. What was clear from that report was that SMBs are not aware of the value added services that a small business tax accountant can perform. These include advice on business strategy, help with reducing administrative tasks through reccomendations of IT and software vendors as well as providing insurance advice. As a result when considering your accountant get clear on the value added services they can provide you as well as it might save the need for other advisors.

See An accountant as an investment to help you grow

My final advice is that you see small business tax accountants as an important investment to allow your business to grow effectively in the future. Try not to see them just as a cost line item in your profit and loss statement. Investing your time to cover the above suggestions will likely pay dividend so take your time and don’t rush in and take the first recommendation that comes your way. This should be seen as a minimum 5 year decision for your small business so choose wisely.

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