Accounting and bookkeeping are very important elements of any business. Effective accounting allows you to make valid decisions, reduce costs, generate more profits, and keep track of your business growth as well as financial status.
Majority of business owners hire accountants mainly on the basis of their experience in taxation. A competent accountant can do much more for a company than just save taxes or make payments. When you don't consider an accountant’s knowledge levels and competencies while hiring, can ruin your business.
To help you make a swift business decision, we created a list of the signs that you have a bad accountant. So what will you do about it as a business owner? Fire him or keep him? The choice is definitely yours. Here is a list of 5 signs you have a bad accountant
1. Cannot Explain Financial Statements
As a business owner, despite having an accountant, you still need to monitor financial records to keep track of the financial condition of your business and for making important decisions. Many small business owners find it very difficult in understanding complex financial statements. Furthermore, even if you have vast knowledge, as a business owner you may be too busy to sit and go through every detail of the financial statements. An accountant must be able to explain these financial statements in a quick and simple way. Sadly, many accountants do not educate business owners on financial reports due to an ill-conceived idea that professional knowledge must remain secret in other to maintain job security.
ALSO READ: 10 Qualities of A Good Accountant
2. Inefficient Experience in Tax
An accountant must be able to take advantage of exemptions and allowances available to business. Tax returns must be filed within the deadline to make sure your business enjoys the maximum benefit. While there are certain accountants who are quite rigid and simply apathetic, there are those who tend to be a bit more aggressive and take risks in taxation that should not be taken. Your business can face losses in both cases. An accountant must have complete knowledge concerning taxation and other related laws, so as to aid you make the most of them in compliance with regulations.
ALSO READ: What Employers look For in An Accountant
3. Low on Industry Knowledge
As mentioned earlier, an accountant does more than just or make payments or save tax. Before employing an accountant, you must examine his knowledge about the industry. Every business sector and industry is governed by different laws, principles and policies. This is very important because an accountant can offer you useful advice and solutions for the financial woes of your business. If this relates to your current accountant, you must reconsider looking for another accountant.
4. Misses out on Deadlines
There are people who have the attitude of leaving things until the last minute. An accountant who leaves vital payments, filing of tax returns and other business transactions for the last minute, because they could not find time is not a good one. In such cases, you may miss important deadlines, which can damage your company’s reputation and finance. Therefore, before you hire an accountant, make sure to look out for referrals and ensure you hire an organized one.
ALSO READ: Risks of An Accounting Career
5. Troubles Reaching to your Accountant
If you are always struggling to find and communicate with your accountant, then you should consider a replacement. No matter how smart he may be, if he is not available in times of need, then he is a bad accountant. You should be able to easily reach your accountant or you must receive a response within 24 hours of contacting him.
All of the points listed above indicate the signs of a bad accountant. Having a bad accountant can damage your business with wrong tax filing and non-compliance of bookkeeping and accounting rules. leaving accounting in the hands of a trusted professional accounting firm can take this load off, which will leave you with space to focus on vital business functions.