The value of a good accountant
A recent report from Chartered Accountants Australia and New Zealand (CA ANZ) found that most people would seek tax advice from family and friends around the dinner table before they would go to an accountant.
This seems very bizarre from an accountant’s perspective.
You wouldn’t ask a friend to dinner and then get them to whip out a scalpel and start performing surgery right there next to the potato salad.
You also wouldn’t tell a qualified surgeon with 20 years experience that they charge too much because “anyone could do their job”. And then just do the surgery yourself based on the information you find online.
We expect that most people see this as an unnecessary and dramatic comparison. “Don’t be ridiculous, it’s not the same thing! Surgery is medical – it’s life or death! It’s complicated and requires specialised training!”
What’s very important to realise is tax is also complex. It demands years of experience and training (and re-training). And it can certainly impact your livelihood if not done properly. The penalties if you get it wrong are severe. That’s why accounting is a specialised service.
Laws and regulations are constantly changing, and there is no “one size fits all” approach. Just because a tax strategy worked for your friend doesn’t mean it also applies to your situation.
Mismanaging your tax and finances could cost you your savings, your house, your business, your retirement fund, or more. And ignorance does not excuse you from the penalties.
The ATO is increasingly on the front-foot with data-share technology. Those who are being lead astray by “friendly” free advice, and people who are purposely trying to dance around the law, are penalised as one and the same.
Which is why asking for free advice from friends, or seeking out cheap, “one size fits all” tax agents, is not a good investment.
But why are people reluctant to seek the professional advice they need?
CA ANZ’s survey of 1,700 respondents found that the three biggest reasons people didn’t seek professional advice were:
- They perceived it as too costly;
- They were unsure of the value of the service, and;
- They thought it meant they had to give up control of their financial decisions.
Let’s address these concerns…
“Accountants cost too much”
We’d firstly like to remind everyone that most accounting fees are tax deductible.
But it’s worth noting that even if it wasn’t, someone who knows the tax system inside and out is going to be able to get you a bigger tax return than Joe Blogg next door. Because a tax agent knows exactly what you can and can’t claim, and how you can be strategic (but legal) in your tax position each year.
And to take that further, a good tax agent will be able to provide you with benefits far beyond a bigger tax return.
It’s obviously important to factor in your needs. A uni student working casually in retail won’t need the same level of advice as a business owner with multiple companies and a self-managed super fund. And of course you will pay accordingly.
But ultimately if you have chosen a suitable accountant, you’ll be saving more than you’re spending.
“But I just don’t see the value in it”
Value is a complicated concept, and like beauty it is often in the eye of the beholder. But to simplify the issue – accountants are one of the most under-utilised professional service providers, but you only get out what you’re willing to put in.
If you’re only putting in the minimum amount of effort and trust, your accountant cannot maximise the benefits for you. If you’re not interested in consulting with your accountant as a trusted advisor, then they can’t give you value beyond a yearly tax return.
If you’re willing to invest the time and resources into building that relationship, then your accountant can return that investment to you doubled, tripled or tenfold.
There are countless ways your accountant can provide more value:
- Your cashflow is irregular and you’re struggling to pay your suppliers? Ask your accountant!
- Want to retire by 65 and don’t know how? Ask your accountant!
- Your business has grown and it’s too much to juggle your Payroll, or your CFO duties? Ask your accountant!
- Need an impartial Power of Attorney? Ask your accountant!
- Looking to buy new equipment for your business, or a company car for your employee? Ask your accountant!
There are plenty more examples where that came from. Get into the habit of asking your accountant for advice before you make any big decisions. It will probably change your life.
“I like to do things my way, I don’t want someone else sticking their nose in my finances”
You might avoid consulting with an accountant because you’re worried about conceding control of your finances. But that is easily overcome by finding an accountant that understands how you like to run things, and is willing to work collaboratively.
Accountants, despite what popular culture may say, are human beings, not robots. You can talk to them, and the good ones will be receptive to your wishes. You just need to do your research and “shop around” if necessary.
And any financial situation that you’re nervous to show to an accountant, is probably one that could get you in a whole heap of trouble. You’re better off getting quality advice, staying honest, and keep your profits in your back pocket rather than paying it back (and more) in fines.
While we might not be able to change people’s attitudes toward’s accounting advice in one fell swoop, we definitely want to educate people so they can make informed decisions.
And this doesn’t just apply to brain surgery and taxes. If you have a complex issue of any kind, logic dictates that you consult an expert in that field so you can ensure you have the correct information, and can make an informed decision on how to proceed.
So, while your loved ones might have the best intentions telling you about their big fat tax return from last year, we recommend you take any dinner-table financial advice with the grain of salt it’s served alongside.
If you’re looking for an accountant who ticks all the right boxes for you, get in touch with us and have a chat to see if we’re a good fit!