How Entrepreneurs can Protect Themselves from a Bad Accountant!

Anyone can call themselves an accountant. They don’t need to have passed any exams, gained relevant experience or belong to a professional body before they start working on your business tax and accounts.

Scary right?

Every week I hear story after story from business owners and entrepreneurs who are anxious about their accountant or have already had a bad experience with one.  Here are the common issues I keep hearing:

  • They lack confidence that their accountant is checking their figures properly
  • They’re not getting pro-active advice
  • They’ve received fines and interest for late payment and submissions despite having an accountant complete their tax
  • They get zero feedback after their accountant has finished their work with them for the year
  • The accountant doesn’t respond to their queries
  • Their feel scared to talk to their accountant because they are patronising and unapproachable

One of the worst?  Receiving bad and unethical advice –  a business owner who was advised by their accountant to claim a small business loan and then close down the company so they didn’t have to pay it back – yes really – this gives me the chills – this could have ended up with the business owner, as the Director, going to jail. 

So, whilst I am a HUGE advocate of taking on an accountant – they really are a brilliant investment (yes – an investment – not an expense), as with any purchase you make, you need to do your research.

So, what can you do to protect yourself?

Check their qualifications

Look on their website or ask them, what qualifications they have.  In the UK, the chartered accounting bodies are:

  • Association of Chartered Certified Accountants (ACCA/FCCA)
  • Chartered Accountants Ireland (CAI)
  • Chartered Institute of Management Accountants (CIMA)
  • Chartered Institute of Public Finance and Accountancy (CIPFA)
  • Institute of Chartered Accountants in England and Wales (ICAEW – ACA/FCA)
  • Institute of Chartered Accountants of Scotland (ICAS)

The Association of Accounting Technicians (AAT/MAAT) is another qualification that is not as high level as the above but still provides adequate training to do tax and accounts.

Not only do the above qualifications mean they’ve had to undergo extensive studying and work experience, but they also have to keep on top of technical updates with continued professional development (CPD), to be declared each year.

Some accountants will refer to themselves as qualified by experience (QBE).  This could be that they’ve worked in the industry gaining significant work experience but haven’t actually sat any exams, or perhaps they started a qualification but never managed to finish it for whatever reason.  This is perfectly acceptable, but you’ll need to be comfortable they do have this timed experience, and that they also have the other following measures in place.

Ask to see their insurance

Check they have professional indemnity insurance – this protects them if they give you wrong advice.  All members of professional accountancy bodies must take out this cover and make it available for clients to see.

Review your engagement letter

As part of the onboarding process, all regulated accountants must provide an engagement letter which is a contract between the two of you, laying out the scope of work and the responsibilities of both parties. Included in this will be a complaints procedure, with details of how to escalate complaints to their accounting body.  If they’re not regulated, you won’t be able to escalate a claim to anyone!

Ask friends for referrals

As with anything, one of the best ways to make sure you’re paying for an honest, technically competent expert is to ask around with friends.  The key qualities you want to look for are that they’re pro-active, offer good advice without you having to ask, and are approachable – so you can ask them ANY question without being made to feel silly.

Tip – cheapest is NOT best where accountancy is concerned.  You absolutely get what you pay for.

One final thing – remember that ultimately, your tax and accounts are your responsibility at the end of the day.  Yes, accountants will help and advise you, but you’re responsible for making sure documents and payments are submitted on time. If you just have a bad feeling, know they aren’t doing things right or doubt their experience, then trust your gut and do something about it.  As the business owner, you will be the one that has to pay the fines and interests when things aren’t done right.

If you want to book a strategy session or power hour with me, drop me a message on the contact page here, and let me help you with the financial issues you’re struggling with right now.  I’m ICAEW qualified (and AAT too) and have 18 years of experience 😀

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