In the course of my coaching experience, I have encountered many cases of SME clients who have disastrous relationships with their accountants. Varied reasons for the disaster, but it all stems down to the choice of accountant.
This article will focus on SMEs that depend on external accountants, as opposed to larger companies that have the capacity to hire an in-house accountant. However, some bits in this article will be useful for any business owner.
Last week, I had to coach an SME company that has pending accounts since 2014 and a spat of lawsuits between him and his accountant. The week before, I had a client with multiple defaulted payments and a huge tax penalty due to an incompetent accountant.
The services of a good accountant can be invaluable. The will help you navigate the maze of account documentation, tax laws, and provide the financial advice you need to grow your business.
In Malaysia, among SMEs, an accountant is only called upon once a year, unfortunately, to do the annual reporting. But in essence, an accountant can also help along the business operation. They can help you to decide whether to buy or lease your premise, how to best provide stock options and other incentives to your employees, deb restructuring, and a plethora of other issues that affect your business.
There are generally two types of accountants: Certified Practicing Accountants (CPA) and Chartered Accountants (CA). Both are university qualified, required to undertake studies and pass further exams to be accepted. The difference is that they are governed by separate accounting bodies.
The primary method of choosing an accountant is by talking to your friends and business associates. Ask for recommendations from them and other professionals as well. Other accountants who do not handle your type of business may also be able to recommend a suitable accountant or at least, help with the decision making.
As you talk to friends and business associates, do your best to find out if the accountant contacts them throughout the year, not just at closing time or tax periods. Also, ask if their accountant gives them proactive advice, recommendations and if they get real value from their accounting firm. It would definitely be helpful if you can also gauge whether their accounting firm has a forward thinking attitude and a reliable relationship.
Now that you have a recommendation, before appointing an accountant, or in some cases even creating a business, you should definitely talk to your accountant. In your conversation, you should gauge his experience, his knowledge, his grasp of where your business is going and what entity needs to be focused to grow your business.
Here are a few questions to ask your potential accountant:
1. How long have you been in the practice?
2. How many businesses like mine have you worked for?
3. What kind of work did you do for these businesses?
4. Do you specialize in any areas of accountancy?
1. Do you charge for the initial consultation?
2. How do you charge for your work?
3. When do I have to pay?
4. Do you charge for telephone consultation?
1. How often will you keep me informed about the progress of my work?
2. Will you consult with me about what I want done?
3. What is your policy on returning calls? How soon?
1. Do you have other office locations?
2. How much of the work do you do yourself?
3. Who will you delegate to?
These are not exhaustive questions by any means, but they should help you to make a sufficiently well informed decision. The key thing to remember is the value that your business will receive from this services. Hire your accountant wisely.
Engr Hj Mohd Prasad Bin Hanif
_Coach & Pendakwah Bebas_
Talk to me should you have any questions or suggestions regarding this article. Thank you!