BUSINESS BITS

Bottom-line coach
Henry Ong

Choosing the right accountant is important because shoddy accounting work is costly, painful, and inconvenient. Retaining incompetent accountants increases your risks of being penalized heavily for late, incomplete tax return and in having to replace one in the middle of a business cycle. A replacement accountant would not only have to reconstruct accounting backlogs, but would also have to be given time to get familiar with the business.

A competent accountant doesn’t simply count beans to prepare and file tax returns, keep accounting books, and generate financial statements he should also analyze, interpret, and concert the information into useful business intelligence.

This makes him a business adviser, who helps the business succeed by showing the business owner how to achieve the company’s financial goals. He should also give his two cents; worth of specific business concerns such as internal controls, costing, inventory strategy, pricing, and even marketing. An accountant that can point only to historical financial performance is a poor choice. He should be able to give sound business advised based on it.

A good accountant is also a responsible tax planner who regularly advises you on latest tax regulations and recommends ways on how to bring down tax obligations legally. He should be able to support and defend you in tax audits and investigations.

In small enterprises, a good accountant understands that the owner’s personal finances are usually connected with the business finances. Thus, he must advice you on personal finance matters such as cash flow planning and budgeting. Specific advice may be on a housing loan that could lower monthly amortization at reasonable interest rates.

To get the most suitable accountant for your business, look for someone with an extensive experience in your specific industry. For instance, if you’re in the grocery business, find one who knows the retail industry; if you’re in restaurant business get one who knows the food and beverage market. This way, the adjustment is minimal if not altogether non-existent. Get referrals from friends and associate – people who can be trusted to know and give you what you need.

Outsourcing your accounting activity to a third-party provider is also an option. You may choose a freelance accountant, whose rate may be cheaper and whose service may be provided more directly. The downside is the possibility that his work would suffer once his clientele increases over time.

You may work with an accounting firm, whose rate may be higher but whose approach would be more professional. Many business owners prefer to work with smaller accounting firms because they are more likely to deal with the principal or the partner. Huge conglomerates with international operations and investors usually choose one of the Big Four in accounting.

In any case, however you choose your accountant, just remember to choose well.