Most people deal with accountants once a year, at tax time for their personal income tax return.
Accountants are expected to have an up to date understanding of taxation laws and policies to help you complete your return or guide you with regards to advice in that area. They are fantastic for helping you find deductions and expenses you may have even forgotten you had. They are also expected to be aware of any recent Government activity in the tax area, specifically if it can help reduce your tax.
You may be looking to engage an accountant for numerous reasons, these can include;
- Your income tax return
- Creation of a will
- Business advice and tax related queries
- Investment advice
- Running your own business, lodging BAS etc.
Some accountants are also licensed to give investment advice on specific products and should also be able to help guide you on management advice for your business (evaluating a business before you purchase it etc).
But how do you choose the right accountant?
As always, word of mouth can be your biggest friend here. Hearing from a close family member or colleague will help direct you to an accountant that has a proven track record, though it is advised that you evaluate their skills to ensure they match your requirements.
When looking for the right accountant, ask yourself ‘what do I need done?’ and ‘where do I want to go?’ – this will help you quickly understand your requirements save you time by narrowing down your search.
Your accountant should be qualified
Be warned that just about anyone can call themselves an accountant, but it is their qualifications and industry associations they are a part of that are vital.
Ask your potential accountant the following:
- Are they a registered taxation accountant?
- Are they a part of any professional accounting bodies in Australia? If so, research them yourself to clarify they are legitimate.
Small accountant or large accounting firm?
Choosing your firm is up to you; though picking a small firm will likely save you money, give more personal advice and offer convenient locations.
Large firms also have benefits, such as having numerous staff to help you, high degrees of specialization and expertise, access to other accountants for advice on your circumstances.
How do you save money on accounting fees?
Accountants will likely charge by the hour, though some smaller firms charge on a per return basis. The general rule of thumb is that the more leg work you do yourself before hand, the less time they will need to spend on your return or request.
Here are a few tips to reduce the fees:
- Organise yourself. Keep strict records of your expenses in a spreadsheet and save the receipts in a folder.
- If the accountant uses codes for each item in your return, ask him/her what they are. You can use this when filing your expenses for different topics. Eg; Car costs = code 9876
- Get all of your group certificates, banking documentation, credit card statements, pay slips and receipts in working order. Ask your accountant what you should be collecting and insure all documents are organised and filed away ready for your meeting.
- Use the previous years tax return to understand what the different categories for incomes and expenses you have, this will act as a starting point for your filing above.
The overall objectives of picking the right accountant?
You must trust them, they must be qualified, you must be organised and overall you should feel secure trusting them to manage one of your biggest money saving areas imaginable. Tax can be a great way to save money, by reducing what you have to pay or by giving you a yearly refund to boost that savings account.