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.
