When it comes to running your small business, having a handle on your finances is essential to your success. This is why you cannot afford to work with a bad accountant. Not sure if you are currently working with the right professional? Read on and learn the top reasons why businesses choose to break up with their accountants and explore alternative options.
Bad at Their Job
Although rare, there are times when an accountant pushes the lines to get a bigger return (or paycheck). In these situations, if you are audited, the accountant cannot be held liable since it is up to you to review the paperwork and ensure the right information was used. Even if you just have a gut feeling that your accountant is doing something wrong, it cannot hurt to get a second opinion, or even switch to someone else. The same goes for anyone who is not clear and honest about fees or how their services are billed.
Depending on your needs, there are times when hiring an outside specialist is a better decision than having someone in-house to handle your finances. Making the decision to outsource your bookkeeping and accounting is not a decision to take lightly. However, when done correctly, it can result in you doing much more on thinner budgets. Before choosing an outside firm, you should consider how respected the company is compared to similar professional entities in the market. Aside from checking testimonials and getting multiple price quotes, you also need to consider whether the company can accommodate your needs.
Since taxes are continuously changing and finances are a very touchy topic, you cannot just choose an accountant on skills alone. Do you often leave voicemails only not to have them returned promptly? Do you often have questions with answers that leave you more confused than when you started? If so, then you are working with an accountant who is not effectively communicating with you.
It is up to your accountant to be open, reachable, and helpful. If you cannot reach them on the phone or if you are not getting documents and information promptly, then they are not doing their job. This is also true if you are receiving vague, confusing, or even inaccurate explanations. Accountants are not just there to crunch numbers and complete paperwork; they also should be a trusted advisor to your business. If they are not coming through, then it is time for a change.
One of the most common reasons for businesses to ditch their accountants is because they do not need one in the first place. Modern software such as QuickBooks is making it easier than ever for business owners and their teams to manage their books with minimal outside help. If you choose to make the switch to software, you will need to determine whether an online or offline software is right for you.
With online solutions, you have the ability to enter transactions from mobile devices and your desktop, plus the programs automatically update for you. Desktop software, on the other hand, is a bit more advanced and includes options such as inventory tracking options, batch invoicing, and industry-specific versions (as opposed to a one size fits all approach).
With average charges of $150 to $400 per hour, accountants can easily cut into your small business budget. If you find that you are spending too much on accounting services you probably should look into alternative options such as using accounting software or even just hiring a bookkeeper for routine record keeping. If you need to save costs, you can even do it yourself.
Accounting software is becoming easier to use and implement in small businesses. There are accounting software tutorials available on the web to help you manage the accounting for your business. You do not necessarily need to give up your accountant directly. If needed you could still consult with them for return preparation and random questions you might have.
If you decide you no longer want to work with your accountant, the easiest and most professional method for ending the relationship is to write a letter to the individual or firm. In the letter, you just need to say you no longer need their services, and you should request any documents from your record that they have on file. You do not need to say anything else or provide an explanation for your reasoning.
Before you make any decisions, however, ensure you have a transition plan in place before moving forward with your decisions. This means you should have copies of essential records (sales invoices, bills, employee information, inventory levels, etc.) on hand to provide to your new financial management team.