How do you measure your accountant’s job performance? The truth is that a bad accountant can go on for years unexposed. The most obvious reason is that business owners trust them to a fault. They don’t really know the right questions to ask and assume that as long as they are not getting audited they are A OK. I have been dealing with tax problem resolution cases for over 25 years and most of those problems were caused by poor accounting. Unfortunately there are far to many accountants out there that never really got the proper training to run their own practice. It’s easy to hang out a shingle and do the basics. Payroll, sales and income tax preparation. QuickBooks stuff, workers compensation audits and even preparing a financial statement for bank financing is routine for most accountants.
It’s not always that obvious when you need to replace your accountant. Here are some warning signs that means you should at least start thinking about it. Most business owners understand how important filing an accurate, timely income tax return is. Not many of them know exactly what’s done before the returns are filed or what happens afterwards. When I ask people how they know if they have a good accountant the answers are alarming. For example, I never have to pay anything, I’ve been using him/her for years, I always get a good return, I never have any problems, he/she knows how to keep the IRS off my back, I’ve never been audited…
Unfortunately these are very poor measures of the quality of an accounting professional. I don’t want to get into why these are bad benchmarks. It has more to do with the mystery surrounding the accounting process and the perceived role of your trusted professional. I believe the term “Trusted Professional” says it all. People assume that if they have someone they can trust they must be doing a good job. In fact, “doing a good job”can be have vastly different meanings to the accountant and the business owner. This brings me to warning sign #10
10. You don’t really know what your accountant does
Yes, they take care of your taxes but how do they come up with the numbers? You should be involved in the process and if you have no idea your accountant is not spending enough time educating you.
9: Their office is a mess
This is a sign that they lack control over their own business. If that’s the case, how would you expect them to help you control yours? Would you use a mechanic that has tools all over his shop?
8: Their staff is unhappy and complaining
Another sign of bad business principles. Staff members are resources for the accountant and the business owner. If they are not happy in their job it will show up in their performance and guess what? You are part of that performance. Would you use a doctor who’s nurses bad mouth him?
7: They have personal problems
I think this one is obvious and sometimes unavoidable. Business is business and if your professionals personal life is in shambles its going to reflect on their business and ultimately yours.
6: They don’t get back to you right away
Communication is crucial in business. if you can’t get your trusted advisor on the phone when you need them opportunities could be missed or problems can multiply. This is another sign that they have more on their plate than they can handle.
5; Your accountant has not educated you about what books and records are and how you should be keeping them.
The most mystifying phrase for business owners. I believe that by explaining exactly what’s expected when it comes to keeping them, business owners can manage their businesses more efficiently and not worry about that dreaded letter that states “We command you to bring your books and records… “
4: They don’t explain the importance of budgeting
In order to manage a growing business budgets are essential. Not just an income an expense budget but also a cash flow budget.
3: They never discussed an exit strategy with you
What’s your end game? Is the business going to die when you can’t work anymore? How will you cash out or transfer the business? These are questions they should be asking you.
2: Do they understand and endorse your business model?
Do you have a bean counter or a business advisor?
1: Are they pro-active in your business?
Do you ever get a call asking you what’s new? Is there anything I can help you with? I have an idea for you?
Sloppy financials? Out of balance books? Don’t know what your paying your accountant for? Are you tired of working 60-70 hours a week, not getting ahead and not knowing why?
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