Tips for selecting an accountant
It’s that time of the year again, when your accounts need to be prepared and sent to Inland Revenue (IRD). This article provides tips and advice on whether or not to use an accountant or Chartered Accountant and how to select the best accountant for your business.
Recommended reading: for further information on business tax law, visit the IRD website and watch the tax video below.
What is an accountant?
Accountants essentially provide an accurate record of the financial transactions of your business. Choosing the right accountant will save you money and provide your business with savvy advice that helps it grow, whilst avoiding the risks associated with unforeseen debt and legal and cash flow issues.
Must I use an accountant?
Start by finding out if your company must use an accountant to prepare its books.
Before the 1st of April 2014, all companies in New Zealand had to prepare financial statements using generally accepted accounting practice (GAAP). Since then, only companies that are “large”, ($30 million total revenue or $60 million total assets) or have more than ten shareholders, are required to comply with GAAP. This means more businesses are now able to do their accounts themselves.
Answer these questions
Answer the following five questions before deciding to do your accounts yourself or outsource it to an accountant. As mentioned above, a good accountant is like a business partner; they don’t just do the books, they also provide you and your business with proactive advice that both protects your business and enables it to flourish.
Here are five questions to guide your decision on whether to hire an accountant for not:
- How well do you understand accounting?
- Do you enjoy ‘managing the books’ or would your time be better spent running the business?
- How well are you prepared for making your tax payments?
- Is sales revenue increasing but profits and cash flow are in decline?
- Are you worried that one day your accounts may be audited?
Tips to choose the best accountant for your business!
So you’ve decided to hire an accountant! Here are few tips to help you select the best accountant for your business:
- Skills match? Are you looking for an accountant to do your tax returns only or a business mentor that also helps guide and protect your business?
- Do you want an accountant that also helps out with day to day tasks such as invoicing and even debt collection?
- How qualified does your accountant need to be? Bear in mind that in New Zealand anyone can call themselves an accountant. Though to manage your tax returns, an accountant must be a Registered Tax Agent and belong to a professional association such as the recently formed Chartered Accountants Australia and New Zealand (CA ANZ).
- Do you need an accountant only or an accounting firm that also has other departments, such as a legal department, that your business may also need to use?
- Does location matter? For example, are you looking for accountants in Auckland, or could your accountant be based anywhere in New Zealand? If you need face-to-face time with your accountant then you would want a local accountant.
- Does your accountant need to have specialist knowledge of your industry?
- Do you have any technology the accountant needs to be familiar with? For example, accounting technology such as Xero or MYOB.
- Do you need an accountant or a Chartered Accountant? Chartered Accountants (CA) are generally more qualified than accountants, are most often used by larger corporations and generally have in-dept knowledge across financial management, auditing, business strategy and taxation.
Doing your own tax is becoming simpler
We recommend you watch this video from the Inland Revenue Department (IRD) about the changes that are being made to make tax management simpler for small businesses in New Zealand. Changes to technology are also making it simpler for businesses to now manage their tax in-house. Though do bear in mind the other hard benefits of outsourcing your book keeping to a professional account firm. The benefits of outsourcing your accounts to a good accountant probably outweigh the costs you will save by doing your books yourself.
We hope this article has provided you with tips and advice on whether you need an accountant, a Chartered Accountant or should manage your accounting yourself.