There are no secrets to success. It is the result of preparation, hard work, learning from failure. (Colin Powell)
Everyone wants to save fees. Professional accountants take responsibility for the accounts we produce. When we get accounts that have been prepared in a package (such as MYOB, Reckon, Xero and the like) we cannot just take that and file your taxes. We have to ensure the results are reasonably accurate (and tax compliant) before we add adjustments such as depreciation, FBT, owner salaries, taxes, etc.
All too often (almost all the time) clients' systems require fixing before we can proceed. It may be that several items bought were actually used in completion of an asset - so we have to move it from expenses to assets. Or an asset may have been capitalised when it cost less than $500 and so can be expensed. Or it may be that it is a mixed use asset - partly private and partly business - which may involve adjustments (including GST). And that's just assets.
There are common errors in every area. We make no pretence that we can pick up every error - even auditors can't do that. We primarily check for items that "look" strange (e.g. gross profit rate drops by half), or items that don't agree with other parts of IRD (e.g. GST) or third parties (e.g. banks). That way we ensure the accounts are at least consistent. Still, as they say, if something can go wrong it will, and if it can't go wrong, it still will 😄.
When we set up this business, we resolved never again would we deal with the same problems recurring in the same accounts year after year. Neither the client nor we enjoy that. So how do we avoid it? We only take on clients who agree to do their accounts correctly during the year, so the end of year is relatively simple. That sounds easy - almost every business person thinks they are doing things correctly, yet so many aren't. So how do we change this.
For clients who don't want a package, we offer an on-line package with a bank feed. You still take responsibility for identifying transactions we can't reliably identify, and we do the rest. These days most people run their own package - which we think can be great. With different packages and different exposure to bookkeeping principles, the room for error is enormous. We expect this early on - but if it continues for more than a couple of years, we'll suggest a move to a simple bank feed - or to another accountant. Otherwise there are two main tools we use.
The first is our fixed monthly fee. It includes training and support just for you - rather than a one size fits all. When you strike something for the first time, rather than guessing you ask us for help. It may be as simple as emailing for advice - or we may connect via TeamViewer and work through the issue with you on your package. The beauty of this is that you don't then risk repeating the same mistake for the rest of the year (or subsequent years). That's better for you - and better for us.
The second is our annual review. When you're ready for the accounts to be done, we arrange a time to review your data with you - usually using TeamViewer. That way we both see what's happening, and you can explain things we don't fully understand as we go. When we find things that need amending, we work with you so you understand why and learn from this so it doesn't happen again. With cloud systems we can edit them ourselves, and if it's a simple one-off error, we might. But most errors we ask you to fix - so you'll learn the correct way for the future.
With both procedures you learn, your system becomes more reliable than would otherwise be the case, and we're not forced to charge more than should be normal. We regard the effective low hourly rate in the first year or two as our investment in your busness. As things settle down, our annual reviews are fairly straightforward, and there are few situations that recur needing our attention during the year. An example of this might be the purchase of a new asset (often a vehicle) with a hire purchase agreement. It's often better for us to work with you on ensuring this is entered correctly at the time, rather than leaving it till year end - especially so the GST is handled correctly in the GST return - more important than ever when changes proposed by IRD come into effect.
When we help you keep your system correct as you go, we both win. We think that's an excellent reason to choose us as your accountant.
It's not surprising so many people visit this page, given the headline. To clarify the answer isn't to bring your accounting to us. We work differently from, and are less expensive than, many of our professional colleagues - but if you come to us it will not be on the basis of fees. This article applies to anyone using a professional accountant.