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How to spot a rogue accountant

By: Stacey Price

man-writingMany small business owners and entrepreneurs understand the benefits of leveraging outsourcing to scale their business. Smart business owners know that having a trusted advisor on their team can have immeasurable benefits. Outsourcing to a trusted financial advisor can lead to increased cash flow, business awareness, knowledge, accuracy, on time reporting and business forecasting for future growth.

However, not all finance professionals are bred the same and engaging a rogue accountant or bookkeeper can result in serious business and financial loss for those using their services.

Unfortunately I’ve seen several examples of poor financial advice that has severely affected the lives of small business owners.

One client came to me after their previous accountant had lodged 18 months of Business Activity Statements without telling the client what to pay, when to pay or providing copies. The client is still paying that debt off to the Australian Tax Office two years later.

Another client came to me asking for Business Activity Statements (BAS) to be prepared, as their previous accountant had registered them for goods and services tax (GST). I later discovered the previous accountant had never actually lodged the GST registration. Another registration had to be done and the ATO issued late lodgement penalties of $890 per outstanding BAS.

Observing the following guidelines will help you to avoid making the same mistakes and being stung.

1. Ask about the accountant’s qualifications

An accountant can be someone who has just finished university all the way through to a tax agent with more than 40 years’ experience, so be specific when asking about qualifications. Are they a chartered accountant (CA), a certified practicing accountant (CPA), a registered tax agent, a BAS agent – or none of the above? Be clear on the differences between these titles and where your potential hire sits before entering into a contract.

2. Ask about their professional affiliations

Ask if the accountant is a member of a professional association, such as the Institute of Chartered Accountants in Australia, Certified Practicing Accountants Australia or the Institute of Public Accountants. Professional members of these organisations are bound by the standards of the association. These associations also have complaint procedures in place if a member of the public is unhappy with the level of service provided by their accountant.

3. Experience comes with a price tag

Accountants who are also a CPA or CA have done a university degree as well as another three years of study. They are also required to undertake an additional 30 hours of training each year to keep their professional memberships active. Experience may cost you more but that experience will benefit your business.

4. Ask who will be actually doing the work

The person you met with may not end up be the staff member looking after your file, so ask who will be working on your business. Are they based in Australia or will your work be further outsourced to an offshore location? Outsourcing accounting to overseas providers presents some real risks to small business owners, especially in terms of the level of service and quality provided.

As with any advisor, your relationship with your accountant should be built on trust. Therefore, don’t be afraid to ask questions before entering into a contract to ensure maximum benefit (and minimum risk) to your business.

Source via SmartCompany

About Ritchie Cruz

Ritchie has 20+ years experience in Public Practice, being trained as a Chartered Accountant in one of the largest 2nd Tier accounting firms in Australia. Experience also includes working in management positions in Medium to Large ASX Listed Companies. Recent experience includes working as a Group Financial Controller in medium size business going through the ASX listing process. Ritchie can offer big company management and reporting experience, to small & medium businesses.

Ritchie has a passion for small business start ups, helping clients grow from humble beginnings. See our small business start up page to see how your business can benefit.

Testimonials

  • Jae Kwon Yoo

    Business Tax – Electrical Contractors

    Ritchie is awesome. He is very professional and responsive and he is always there to help you. He even replies during weekend. He needs some…

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  • Zac Fryer

    Director, Import and Distribution Company

    Ritchie Cruz provides and high level of accounting expertise and goes above and beyond in answering any queries we have.

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  • Dr Krish Perananthan

    Cosmetic and Implant Dentistry

    Ritchie was recommended to me by my father and I have also continued to recommend him to my friends. He is reliable, efficient and has a…

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  • Kellie Pincham

    Director
    Automotive Parts Retailing business

    Cruz & Co offer a great professional and friendly service. Ritchie gave me confidence running the business knowing that he was readily available for…

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  • Regina Wang

    Business Tax – Beauty Salon 

    Ritchie has been managing my tax matters as a sole trader for 2 years+. Always very responsive to my questions and make effort to reply…

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  • Jonathan Yeoman

    Director, Technical Design Company

    This is a new business startup and Cruz&Co. have provided great help, guidance and reassurance from the beginning.

    Ritchie has provided us with excellent service and…

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  • Daniel Robey

    I have and continue to recommend Cruz and Co to many businesses and individuals who are looking for a business advisor and accountant that goes over and above…

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  • Jonathan Fambart

    Business Tax – Travel Industry

    Cruz & Co was introduced to me this year and it was the best decision for my sole trader and personal taxation affairs. Ritchie the…

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  • Napoleon Guines

    Director, Travel Company Operations

    Ritchie Cruz and Co are accommodating and have excellent service.

    Cruz & Co have impressed me the most is due to their efficient service.  They are…

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  • Vanita Aloda

    Restaurant Owner

    Ritchie Cruz is my Accountant. We have a solid 10 year relationship.

    Ritchie as always provide me with honest and efficient service.

    Is a great communicator, always replies efficiently to…

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  • Home
  • About
    • Meet the Team
    • Our Clients
    • Testimonials
  • Services
    • Tax Consultant and Compliance Services
    • Small Business and Sole Trader Accountant
    • Outsourced Accounting Solutions
    • Business Structure
    • Outsourced CFO
    • Working Visa Refunds
  • Resources
    • Tax Refund Process
    • Client Assistant Schedule forms
    • Downloadables
    • Helpful Links
    • Rental Property Cashflow calculator
    • SMSF Tax Refund Process
  • Contact Us
  • Blog