Signs It's Time To Find A New Accountant

While accounting is about facts and figures, many businesses make the mistake of incorrectly viewing their accountant as a purely transactional engagement.


Feb 02, 2023

We believe that the accountant relationship is far more than financial statements and tax obligations. An accountant plays an important role in the success of your business through guidance and making sure that you're compliant. Part of this is done through an open, positive relationship with you and your team. This ensures all the detail is captured and proactive advice on the best financial steps to make are well-informed.

While no relationship is perfect, there are a few telltale signs that indicate it might be time to consider looking around for a different accountant. In this article, we explore some of these signs as well as provide some advice on how to go about addressing these.

You never hear from your accountant outside of tax time

One of the most common complaints that we hear from businesses is that their previous accountant was never forthcoming with proactive advice or tips throughout the financial year. If you're finding that your accountant only ever talks to you to send you a bill, confirm GST or discuss tax details, you might want to ask whether or not there are other things you could be doing in your business to improve its financial performance.

Unfortunately, many accountants' business model is based around minimal client contact. This isn't necessarily a good or bad thing depending on your expectations, but if you're someone that needs some extra guidance with the financial aspect of your business you might want to consider an alternative accountant that builds in regular check-ins and guidance to their engagement.

Of course, it's important to acknowledge that your specific accounting package may be based around simply helping you meet tax and GST obligations. If you do ask your accountant to provide more proactive guidance, make sure that you know what this looks like from a cost perspective.

If you're worried that your accountant simply doesn't work this way and you won't get the guidance that you're seeking, start to look around online, read reviews and start talking to potential accounting firms to get a sense of their approach around regular communications & advice.

Legitimate expenses are not being offset against your tax

Another common complaint that we hear from businesses that switch to RightWay is that they believed there were legitimate business expenses that were not included in the deductions from payable tax or GST. While it's important to make sure that only eligible expenses are deducted from period-end tax returns, missing out on deductions can cost your business significantly - especially if these costs are frequent and/or large.

Remember, with business expenses, the eligibility for tax deductions will vary depending on the nature of the cost. In some cases, the entire amount can be offset against your payable tax or GST. But for other costs only a portion can be deducted.

It's your accountant’s job to help you understand how each of these expenses should be handled from a tax perspective. They should help you understand how to code them correctly in your accounting software and when it comes time to produce a tax return and file it to IRD, you should have the peace of mind that all the legitimate expenses that could be deducted have been.

We need to stress that a tax agent or accountant needs to ensure that they are doing everything in their power to keep you compliant with tax regulations.

Sometimes this can cause providers to approach expenses somewhat conservatively. As a business, you want a good balance of an accountant that understands the rules around deductions and follows them while also being able to identify where all legitimate expenses exist and make sure they are all captured - saving you money in the process.

You get incorrect information about your obligations

This one's a bit more serious. While ultimately you as the business are responsible for ensuring information is correct, part of the reason you engaged with an accountant is to have an extra safety net around the accuracy of your tax filing and payments. If you've taken the steps to maintain accurate records that are coded correctly, it's only reasonable that you expect accurate calculations and returns produced by the accountant.

What's more, if you're finding that information you've received verbally, or in writing from your accountant or tax agent is simply incorrect when cross referencing information from official websites like IRD, you are well within your rights to raise that concern or even start to look around for a different provider.

Getting incorrect information about your tax obligations can cost you a fair amount of stress and money. Whether it's filing incorrectly and underpaying your tax obligations or overpaying based on incorrect information, when operating on inaccurate information, your business is left in a vulnerable position. Best to start looking around.

Calculations are often wrong

We don't think that it's a grand statement to say that any accountant worth their salt should be able to accurately calculate and produce financial statements or returns, provided what's supplied to them is clear and correct.

With software like Xero, accountants have a robust, easy-to-access platform to use. If connected directly with your bank accounts and maintained internally by your team, this should give them all the information they need to determine payable tax, GST and ACC. It should also provide the raw information to prepare any other financial statements.

Preparing financial statements might be required for activities like going to the bank to get a business loan. They can also be used to secure a lease on a new property. For anything that's high-cost or high-risk, you should assume that a lender or prospective landlord will go through the financials carefully to make sure that everything makes sense.

If there are inconsistencies or inaccuracies in these documents it can impede your ability to secure funding, get into the perfect premises or an accurate filing of your tax obligations.

When calculations are done incorrectly and filed to IRD, you risk potential future penalties and built-up tax payable. Audits on business are fairly common from IRD, and their processes are detailed and designed to uncover any discrepancies or short falls in tax owed vs tax paid. While being audited in itself isn't an inherently bad thing, it can be very stressful if there have been major miscalculations that result in a discovery of unpaid/unfiled tax.

If you find that your accountant has miscalculated and caused you to pay too much or not enough, then the core of your relationship with them is going to be shaky. Mistakes are human; however if these are frequently made or made at the scale that seriously harms your business, you are well within your rights to look around for a new accounting partner. Just make sure to check the details of your written agreement with your accountant first around notice periods.

There’s no attempt to explain things properly

One of the most frustrating things that we hear about the industry is when good honest people put their trust in accountants to make sure their financials are correct and their tax obligations are met - only to be treated as a name and number on a spreadsheet.

Sure, some businesses might accept an accountant's job as essential but unnecessary to understand. We still think that it's incumbent on the accounting industry to ensure our clients have as much information about their business and financials as possible.

In the space of tax, GST and ACC liability, accountants should be seeking to articulate what the calculations are and how the final figures have been arrived at. We think that there should be some attempt to educate businesses on how these various obligations work. What’s more, when a client asks their accountant a question, they deserve to have a clear answer, put in words they understand.

If you feel like you’re getting highly technical jargon that leaves you none-the-wiser, it might be time to look around.

You don’t feel good about the interactions

For us, people are at the centre of all of our successful relationships with businesses.

Just because the work involves fine detail and working with financial data doesn't mean that customer service falls by the wayside. To the contrary; the better relationships are with our clients, the better service we can provide them.

With a good relationship in place, we're able to provide better suggestions on optimising the business. As your accountant, you're trusting us with some of the most sensitive data in your business - your financials. We take this responsibility seriously and make sure that you have no hesitation around trusting us and our expertise through ongoing positive, proactive communications.

If you're finding that you come away from your conversations with an accountant feeling confused, frustrated or uninspired then the accountant is not doing their job properly. You are paying an accountant to give you peace of mind and confidence around your finances. You should be able to rely on them to give you constructive advice and guidance that you can put into practice.

It's totally reasonable to expect excellent customer service from your accountant - not just accuracy around the facts and figures. If you're looking for an accounting partner who delivers excellent service in a personable way, we’re the ones to talk to.

Get help running your business

We offer bookkeeping and payroll and of course accounting and business advice services to our clients. You don’t have to hire for these functions internally - simply chat to us about your needs and we can help build a plan that works for you. It might free up time for you to focus on growing your business and doing the work you love.

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