What are accountants and bookkeepers for?
Accountants provide financial advice and recommendations to improve your business financial strategy or personal finances. They're hired to audit the books quarterly and prepare year-end business statements and tax returns. They'll analyse, interpret and convert financial data into actionable business intelligence to grow your business, save money and improve its profitability. An accountant usually holds a degree in business, finance or accounting.
Business accountants can do:
. Taxation advice and planning (employer taxes, state taxes, Fringe Benefits Tax, Capital Gains Tax)
. Cash flow management
. Retirement planning
. Wealth accumulation
. Self-managed superannuation funds
. Estate planning
. Risk insurance
. Remuneration and salary packaging
. GST (goods and services tax), BAS (business activity statement) preparation
. PAYG (Pay As You Go) withholding and instalments
. Property investment
Meanwhile, bookkeepers are persons with experience in daily accounting entries. They keep track of income and expenditure and collect necessary financial information for government and regulatory bodies, investors, banks, etc. They may have a degree or be trained on-the-job and may become certified through the Institute of Certified Bookkeepers. Most of the time, they use accounting software.
Some of their tasks include:
. Posting accounts receivable (preparing invoices) and payable
. Recording payroll
. Compiling reports and financial statements (profit and loss statements, balance sheets, income statements)
. Bank and credit card reconciliation
. Purchasing supplies
. Maintaining employer-related taxes
. Inventory control
How can you choose the right accountant?
Choosing a good accountant for your business isn't a task to take lightly. He/she will have access to the company’s private records and data. Take your time for the selection process to make sure you'll be able to choose a firm you can trust, with a commitment to ethical behaviour and high professional standards and a genuine concern for your business and its success. If the firm you choose doesn't have a good performance or if you have a bad experience with it, don't hesitate to change your choice. This changing shouldn’t cause any disruption to your business.
Step 1: Ask yourself.
Here are some questions about your needs and preferences that you can consider before hiring an accountant/bookkeeper. It's important to think about it beforehand because accountants charge by hour. If you know exactly what you want, it will save your money.
1. Do you need an accountant only to help you compile end-of-year financial statement and prepare your income tax return or do you want a complete audit with periodic advice?
2. Do you prefer a small business which will be more committed to your account or a big name-brand firm with larger established practice (for example, the Big Four auditors PwC, Deloitte, Ernst & Young or KPMG)?
3. Do you need your accountant to be specialising in an area of expertise?
4. Which qualifications must your accountant have?
You can hire a non-certified accountant to handle your business’ financial statements, analysis, and bookkeeping. But you need an accredited accountant to help you prepare a tax return, for example.
Check for accreditation from an officially recognised accounting organisation. The four principal and most widely recognised professional accounting organisations in Australia are The Institute of Chartered Accountants in Australia, CPA Australia, the National Institute of Accountants and ATMA (Association of Taxation and Management Accountants). Their members have to adopt a strict code of conduct, hold an approved undergraduate university degree and a postgraduate programme, complete a minimum of three years supervised experience, and undertake extensive continuing professional development each year.
Step 2: Ask your prospects.
After having selected at least 3 accounting companies, you'll have to ask for an introductory meeting. Try to get this first appointment free. You should cover these questions during the interview:
1. How long have you been in business?
2. Are you a member of a recognised professional accounting organisation?
3. What are your qualifications?
4. Do you have expertise in a specific area?
5. Do you participate in ongoing education course?
6. Which software are you using? (Check if the accountant is familiar with the software that your business operates.)
7. Do you have experience in my industry or a similar one?
8. Who will be handling my work?
9. How long will you take to complete the work?
10. How do you charge? Is it an hourly rate? Upon which bases fees are charged?
11. Can you provide me with names and contact numbers of your previous clients?
Step 3: Know the pricing and how to cut costs.
The standard accounting and financial advice service costs range usually from $25 to $154 per hour, with an average of $60.50 per hour. A bookkeeper will do the basic accounting jobs for half of the cost of an accountant (an average of $38.17 per hour), but can’t handle more complex tax matters. Preparation and lodgement of tax returns cost an average of $528 per job while larger GST and indirect tax jobs cost a little more, with an average job clocking in at $1,291. Follow these pieces of advice to cut costs and get the better price:
1. Ask for a detailed bill by type of service, including time and billing rates. That will give you an indication of areas where you can save money. It’s important to have agreed on price and payment terms before starting.
2. Don't always go with the cheapest accountant, but pay for the service you need.
3. Pay on time. If you delay paying an invoice, the service could suffer from it.
4. Do some of the basic bookkeeping tasks yourself — allocate 15 minutes every day to keep accurate records.
5. Keep your records clean and clear so the accountant can understand the information quickly, which will save you money.
6. Use bookkeeping software to track income and expenses and prepare all documents easily. Make sure you're trained to use this software, even if you outsource bookkeeping, and that records are backed up for safekeeping.
7. Keep your accountant informed of your business and financial decisions.
8. Be prepared before each meeting - write down your questions. During the meeting, take down notes to remember some details.
For more tips, consult the top accountants in Australia today.