DO’S AND DON’TS WHEN CHOOSING AN ACCOUNTANT

You’re an entrepreneur.  You’ve started a business and now you need to contract with an accountant.  Where do you start?

Or maybe you’ve been operating for a while and you feel the need to change accountants.  This is a very daunting and stressful task.  Just thinking about what lies ahead fills you with dread.

Choosing the right accountant is imperative, as it is the same as choosing a business partner.  Here are a few do’s and don’ts, intended to provide some guidance on where to start and what to look out for.

DO’s

Do ask for references. Ask your friends who they are using and whether they are satisfied with the current level of service that they are receiving.  This is an effective way of finding an accountant, but does not always necessarily mean that you will be 100% satisfied, so some more due diligence may be needed.

Do try searching reputable online sources. www.findanaccountant.co.za is just one of the websites where accountants list their services.  Other options are www.sageone.co.za or www.saipa.co.za, to name but a few.  The accountants listed on these websites have been vetted.

Do make sure your accountant is registered with a professional body. Accountants who are registered with a professional body like SAICA, SAIPA, SAIBA, ACCA, etc. have been professionally assessed and have completed practical training.  They are bound by a Code of Conduct and also have annual CPD requirements which ensure that members stay up to date with all recent changes and tax amendments.

Do ensure your accountant is able to provide the services that you need. Bookkeepers, for example, are not able to compile financial statements and handle the tax affairs of a CC or Pty.  If you are unsure of what your accountant’s designation means, you can always contact their controlling body for more information.

Do read your engagement letter. This is a legally binding contract between your accountant and your business.  Ensure that all of the services that you need are specified, and that each party’s rights and obligations are clearly set out.  Make sure you are aware of any exit clauses.

Do trust your gut. If after your initial meeting with the accountant, you don’t feel 100% comfortable, trust your instincts.  You don’t want to be just another number – you want a business partner.  If your accountant is not available to meet with you on a monthly basis, how can they be a contributing partner to your business?

DON’Ts

Don’t choose the cheapest quote. Yes, the costs of the accounting services will and should factor into your decision, but should not be the deciding factor.  Your main focus should be the quality of service delivery.  You want an accountant who will help your business grow.

Don’t compare professional designations. In the SME environment a CA(SA) = AGA(SA) = Professional Accountant (SA) = CCA(SA) = CBA(SA).  Unless your business needs to be audited or independently reviewed, any of the aforementioned designations are appropriate. Yes, experience and qualifications play a role, but once again, it must be stressed that your focus should be on the quality of service delivery. 

Don’t ask your auditor to provide compilation services. If your business does have to be independently reviewed, or audited, your auditor cannot also compile your financial statements without proper safeguards.  The reason for this is that the auditor has to audit the annual financial statements. If they have also compiled them, a self-review threat is created.  Unfortunately, we see this happening in practice too often, even though it is against current legislation.

Don’t consider accounting firms that are not making use of online bookkeeping software. You don’t want to be paying a professional for data input services.  That is just a waste of your money.  Accounting software has significantly improved in recent years, which greatly decreases data entry costs.  If your accountant is not yet on board with this, ask yourself why.  The use of cloud accounting will also broaden your location considerations, as your accountants can be located in another province without compromising on service delivery.  (Look out for a forthcoming article on cloud accounting.)

Don’t stay if you are not happy with the current level of service. Your business is your livelihood.  We make a big fuss about service delivery from other service providers, but then we grin and bear it when we receive substandard service from our accountants.  The reason for this is because it is just SO frustrating to move, but in the long run it may be the better decision.

Don’t be afraid to ask for a second opinion.  If your doctor diagnosed you with cancer, would you not get a second opinion?  Why be afraid to do the same for your business?

We truly hope that the above has provided some guidance in your decision-making process.  If you need any further information or have any questions, please feel free to contact us.

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