Many small business owners set up their businesses by relying on their product or service knowledge and often leave accounting and financial management tasks to bookkeepers and accountants. Besides tax filing, these professionals can provide a comprehensive assessment of a business’s finances by keeping track of their financial transactions and monitoring their growth rate and profit.
The accountant’s extensive knowledge and experience in accounting can help organizations navigate the financial challenges of running a business. Therefore, a good relationship between the company and their accountant can significantly improve their business performance and increase their success.
However, business clients often outgrow their current accountant over time. As their business grows and matures, they may start to find that their accountant is not offering the range of services they now need or are not provided with the best advice or service they need.
Here are six signs that indicate it’s time to think about finding a new accountant.
Communication is key to efficient accounting and financial management, which will lead to the business’s success. Accountants and their clients need to be in constant contact to discuss the business’s taxes and address other financial problems.
However, it might be time to find a new accountant that can help the business address their financial matters, if the accountant is not:
- committed to improving the success of their clients;
- taking too long to return calls or emails;
- setting up regular meetings; and
- giving good advice
Failure to Provide Guidance
Accountants are responsible for making their clients understand their business’s financial statements. Financial statements provide insight into a business’s performance, operations, and cash flow by listing relevant information about its revenue, expenses, profitability, and debt.
For business owners to understand their company’s financial statements, accountants must explain these in plain English, not accounting jargon or terminologies unfamiliar with their clients. A clear explanation of the reports will allow businesses to improve their business performance.
Suppose the accountant fails to provide guidance and sound advice regarding the business’s expenses, income, and tax situation. In that case, it can be problematic for their client in the long run.
Best Practices for Record Keeping
Accountants should be up-to-date with record-keeping laws that require businesses to retain financial records. Accounting documents, including tax returns, must be held for safekeeping for a certain period from the end of the last company financial year the documents relate to.
Maintaining accounting documents and other business records allows companies to attain regulatory compliance in their respective countries, whether in the US, Canada, UK, or EU jurisdiction. Therefore, businesses must have an accountant that can provide them information on how long to retain financial documents and update them if there are any changes to regulations.
If the accountant has out-of-date information and has no desire to actively update their knowledge on tax laws and record keeping regulations, it may be time for the business to make a change.
Tax filing is the most crucial task of an accountant. Hence, it is their responsibility to meet deadlines for tax returns and other documents, such as accounting records, that their business clients must file.
An efficient accountant with effective financial document management can make it easier for their business clients to pay the right amount of tax by the deadline as their tax return requirements are in good order and ready for filing.
If the accountant misses important deadlines or fails to file regular extensions for tax returns, in that case, the business owner should look for another accountant. Being unable to meet deadlines can result in hundreds or even thousands of fines and penalties for the organization.
Tax deductions can improve a business’s cash flow. Thus, many firms want to maximize their deductions during the tax season. Having a diligent accountant can help them take advantage of all tax deductions or credits. Accordingly, a good accountant will continually help their business client lower their overall tax rate and maintain a healthy cash flow.
However, suppose the business is paying too much in taxes and feels they are missing out on tax deductions. In that case, it may be time for the organization to look for another accountant and find someone who will pro-actively support the business in identifying potential deductions and maximizing their tax savings throughout its financial year.
Outdated Financial Systems
Businesses need to keep up with industry trends, particularly for their accounting or bookkeeping systems. In this digital era, companies must leverage technology for their accounting and financial management. It will simplify record-keeping and accounting processes and also support the business’s growth.
Manually tracking business expenses on a spreadsheet or notebook is immensely unproductive and is not time and cost-efficient. On the other hand, using technology and cloud accounting removes bookkeeping and accounting complexity, making these financial activities more straightforward for small businesses and their accountants.
Companies like KIPPIN offer business accounting software that can provide businesses real-time financial business insight because financial transaction records, such as invoices, are automatically synchronized with the business’s accounting profile.
Change is often necessary for businesses to ensure that they are getting the best possible advice and service they need.
Finding a new accountant is a step that small businesses need to take to grow their business. Although many accountants and accounting firms offer accounting and bookkeeping services, companies need to ensure that they find someone who can support their business growth journey.
Consequently, business owners should select an accountant that can act as their trusted business adviser, who can help them file their taxes and manage their cash flow while remaining compliant with all the rules and regulations they need to follow.
Need a new accountant?
KIPPIN is a cloud-based mobile bookkeeping service tailored to simplify all bookkeeping and accounting activities of businesses. We align our clients to top Bookkeepers and Accountants on our platform. We also provide a software-only solution, allowing our clients to manage their own books using our accounting platform.
Contact us today at 1-905-581-9362 or [email protected] You may also visit our website at www.kippinitsimple.com to learn more about our products and services.