Choosing an accountant
William MacKenzie provides some guidance to dentists starting up
in practice as to how to choose an accountant and the most
important factors to consider.
Should you have an accountant?
Why should I have an accountant acting for me? The answer is you
don't but the great imponderable is that without professional
advice you do not know whether or not you are paying too much
tax.
Not all dentists in practice are professionally represented in
connection with their tax affairs. If a dentist is deemed to be
employed rather than self employed for tax purposes there is
considerably less merit in using the services of an accountant
because of the restricted nature of tax deductions available in
employment. However, there is a general belief that those who have
an accountant acting for them will pay less tax as a result. The
presumption being that the tax saved will more than cover the
accountant's fees. This may or may not be the case but you should
focus on the big picture. You should view your relationship with
your accountant as integral to your practice. It is a relationship
that is built on complete trust and mutual respect. After all, you
will be divulging intimate details of your financial and personal
affairs. A proper professional relationship is not one that is
formed instantly but is developed over a number of years and if
there is one thing above all else that you are buying it is peace
of mind.
How do I decide?
Where do you start? Going the route of Yellow Pages is a bit of a
hit or miss. Just try looking under the heading "Accountants" and
you will soon be immersed in a sea of reds, blues and greens. How
on earth do you make an informed choice from this shoal of
accountants? The answer is you don't - it's a complete
lottery.
Many people will follow the recommendation of a friend or
colleague. But is this necessarily the best route? The answer is -
it could be and often is. However, you have to ask yourself whether
what is good for your friend or colleague is good for you. He or
she may be an excellent dentist but are they in the ideal position
to judge the best accountant for your individual needs? The best
advice is to make an appointment with the prospective accountant to
establish whether or not the personal chemistry is there. Personal
chemistry is very important. It does not matter a whit if your
accountant is a technical expert should you not feel comfortable
confiding in them.
It is imperative that you have an initial meeting with any
prospective accountant. Nowadays, most if not all accountants will
be only too happy to have an initial meeting, free of charge, to
provide you with the opportunity of finding out more about the firm
before you buy.
The attached table sets out some of the FAQ's you may wish to
ask your accountant at the initial meeting, together with separate
columns identifying the relevance of such a questions and
commentary.
Table of questions to be posed to accountant at initial
meeting
| Question |
Relevance
Yes(4)/No(5) |
Commentary |
| How much do you charge? |
5 |
Often the opening question but not the best way to start. See
comments under Fees. |
| How many other dentists do you act for? |
4 |
This is a good way of finding out how much experience the
prospective accountant has of the dental profession |
| What qualifications does your accountant have? |
4 |
Not a definitive question but useful in finding how much
technical expertise the accountant has. Generally, you would expect
the accountant to be a member of one of the chartered accountancy
bodies or a chartered tax advisor. |
| Who is going to do the work or be involved on a day to day
basis? Who is going to be the first point of contact? |
4 |
You want your initial meeting to be with the person who you
will be doing business with, if at all possible. You don't want to
be fobbed off with a mere figurehead. |
| Are you able to provide me with any references or
testimonials? |
4 |
Useful but not conclusive. Like all references, would carry
more impact if you follow up with telephone call and speak to
referee direct. |
| Whilst I am here, I have a particular tax problem and am
wondering if you could help me…..? |
5 |
Not to be recommended - you are not visiting the accountant to
get free tax advice! |
Fees
The trouble with asking this question at the start of any
discussion is that the answer is always - It depends! Ultimately,
it depends on the level of service required by the client. For this
reason it is not advisable to start with this particular question
as the answer will always be the same.
Cost is of course very important but survey after survey makes it
abundantly clear that the level of fees charged by the accountant
is never the most important factor in any dentist/accountant
relationship. The level of fees usually comes further down the list
of factors to be considered and after the number one requirement-
Could you please be more proactive? Another important
consideration, usually identified by surveys is the requirement for
a breakdown in fees so that dentists know what they are paying for.
Most problems with regard to fees arise as a result of you, the
customer being unable to establish the value provided by the
accountant. This is notoriously difficult when the customer is
buying an intangible service that he cannot see. There is therefore
a tendency to assume that all accountants are the same, which they
most definitely are not!
Conclusion
There are a lot of factors to be taken into account in arriving at
the decision to appoint your professional advisor but if you are
well prepared it should result in a successful - and long lasting
relationship.