It’s sometimes necessary to ask for outside help for your business. Whether you need somebody to prepare your tax return or some help with payroll, it can save time and help you focus on larger picture issues.
That said, not every accountant is as honest or as law abiding as you’d hope or expect. How do you know what sort of signs to look for to ensure your accountant is a reputable one?
1st Sign Your Accountant May Be Disreputable
1.Not Overly Concerned about Paperwork
A reputable accountant will instruct you to keep all your receipts and other business related paperwork as well as encourage you to keep accurate payroll and other records. If your financial controller doesn’t seem overly interested in record keeping, then there is a good chance he or she might be indulging in shady practices.
Inadequate record keeping makes it easier for an accountant to hide things they don’t want to be found and, as it’s you who is responsible for submitting your accounts, you will be liable for any subsequent penalties and not your accountant.
2nd Sign Your Accountant May Be Disreputable
2.Charged for Tax Returns Based on Your Refund
Most accountants will operate on a flat fee basis when preparing your tax return so alarm bells should sound if they ask for a percentage of your refund as payment instead.
This method encourages the accountant to massage the figures to obtain a larger refund and, subsequently, the most substantial fee for them. Any investigation into your return and it’s you that will be held responsible for the error and liable for any subsequent fines and penalties.
3rd Sign Your Accountant May Be Disreputable
3. Won’t (or Can’t) Explain in Understandable Terms
A good accountant doesn’t just understand their accountancy; they understand that their knowledge is specialist and will work hard to explain their activities in clear and straightforward terms, so both client and accountant know what is happening and why.
If your accountant won’t explain things in clearly understandable terms, then that’s a warning sign as a reputable accountant will want you to understand what they’re doing. How can you possibly value what an accountant does if you don’t know what that is? Good analysts are aware of this and act accordingly as they want to keep you as a long-term client.
4th Sign Your Accountant May Be Disreputable
4. You Are Encouraged To Fudge The Numbers
While it is the job of an accountant to help you reduce your tax liability legally, some actions are deemed illegal. If your accountant encourages these, there’s a good chance they’re up to something disreputable.
5th Sign Your Accountant May Be Disreputable
5. Your Instincts Warn You
Intuition shouldn’t be underrated. If your accountant is up to no good, then there’s a good chance you’ll pick up on it, even if you don’t understand how or why they are doing things. Trust your gut and look for other signs if you feel uncomfortable in any way.