How To Choose The Right Accountant

by Tax Guy - Burlington Accountant on September 13, 2010 Print This Post Print This Post

Today’s article is from Frank Flynn who operates Taxpayer Relief Letters, a niche consultancy specializing in the writing of narrative content for Canadian taxpayers who are applying for relief from penalties and interest on tax liabilities.

I spent over a decade as a senior enforcement officer with Canada Revenue Agency’s Collection Division. During that time I dealt with thousands of taxpayers and their accounting practitioners. Throughout my career with the Agency, I never ceased to be amazed by the choices individuals and companies made where accountants were concerned.

As a collection officer, I routinely met with taxpayers and their accountants to discuss payment arrangements, collection actions, disposition of assets, corporate restructuring and any number of other issues. I would sit in meetings with business owners and I’d wonder, “why on earth is this tiny, family run organization, being represented by senior talent from one of the big five accounting firms?” It was not uncommon to encounter medium or even small business enterprises using National and sometimes International accounting firms.

Sometimes it was the other way around. I’d sit with Chief Financial Officers from a mid to large size company, waiting for their harried, disorganized accountant to arrive. The accountant would arrive, files would spill out onto the table, excuses and apologies would be sputtered and general embarrassment would descend. Again, my internal dialogue, “What are they doing with this guy?”

Finding the right accountant can make a critical difference in the success or failure of any organization. Yet so many Canadians give precious little consideration to whether or not they’re using an accounting practitioner who is best positioned to meet their particular needs.

You wouldn’t go to a dermatologist if you needed knee surgery, but all too often that same kind of logic doesn’t seem to apply to choosing accountants. In my discussions with accountants, I’d make a point of enquiring with them what their area of interest or expertise was. I discovered often enough that the accounting practitioner had little interest or expertise in the taxpayer’s particular set of problems.  They’d say things like, “Oh I know Ted has a problem with his GST, but I’m not really a tax guy. I do mergers and acquisitions. I’m just helping him out because our sons play on the same hockey team.” Or, “I don’t actually do tax accounting. I specialize in business valuations. I’m helping Susan out because she’s a friend.”

Among the most disconcerting aspects of the ill-fitting accountant dynamic, is the trickle down effect on the client. Consider this. Imagine you’re a small to mid size company or maybe an individual with personal income tax needs, and you’re using a big five accounting firm. Say you’re the subject of a deep probe audit by the C.R.A. Now imagine that your accountant is also representing a major multi-national corporation that is also under audit. Assume that the major multi-national pays thousands if not tens of thousands of dollars a year more to your accounting firm than you do.

When it comes time to negotiate the nuts and bolts of these two audits, whom do you think your accountant is really going to go to bat for? Do you think your accountant is going to jeopardize his or her relationship with the C.R.A Audit Division by arguing vociferously on your behalf, while in the midst of an audit of a much larger client?

There’s a pretty good chance your interests are going to be sacrificed for the better treatment of a much larger client. The fact of the matter is, your big firm accountant may have a greater vested interest in maintaining a good relationship with the Audit Division, than they do in aggressively representing your position. That’s a problem.

Conduct a quick self-assessment of your accounting issues and needs. Make a list. After you’ve done that, do an honest evaluation of your accounting service provider. Do your needs match up with what the accounting practitioner is in a position to provide? Are you paying for more services and resources than you need? Does your accountant have the skills, time and resources at his or her disposal to address your accounting issues and needs? Are the fees you’re paying reasonably commensurate with the services your receiving?

You probably wouldn’t select a medical doctor based on the fact that your kids play on the same hockey team, or because you’re in the same book club. An accountant is the doctor of your financial health. Use the same kind of discretion you’d use to select a doctor, when selecting an accountant.

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Frank Flynn operates Taxpayer Relief Letters, a niche consultancy specializing in the writing of narrative content for Canadian taxpayers who are applying for relief from penalties and interest on tax liabilities. He also provides consulting services to people and companies who are under collection action by C.R.A. Frank Flynn has published plays, essays, and letters internationally and he holds a joint major Bachelors Degree in English Literature and Cultural Studies. He is currently completing a Masters Degree in Creative Writing. His website can be found at www.taxpayerreliefletters.ca

About The Tax Guy...

Dean Paley CGA CFP is a Burlington accountant and financial planner who services individuals and business owners locally, nationally and internationally. Dean has appeared in the National Post, Toronto Star and Metro News.

To find out more, visit Dean's website Dean Paley CGA CFP or connect via Twitter @DeanPaleyCGACFP.

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