16 Signs Of A Bad Accountant (And 5 Signs Of A Good One)
Your accountant is the gatekeeper between you and financial ruin. A competent one will be noticeable by theirabsence. You'll communicate occasionally, and that's it. Books are balanced and returns are done on time.
A bad one will be just the same. Except you get fines. Or go to jail for tax evasion. Or theygoto jail for embezzlement.
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Here are some telltale signs:
1. They Miss Deadlines.
Miss a filing deadline, get a fine. Meeting deadlines is Accounting 101. If theycan't do that, what else arethey messing up?
2. They Ignore You If You're Difficult.
OK, maybe you're not paying much. Maybe your recordsare a nightmare. Maybe you have a prickly personality.
Still, it's not like they'rea plumber and you can hire another one fast.
If theydon't want your business theyshould be honest and say so. No harm, no foul. You hire someone else.
What you don't want is to have to wait 3 months for your paperwork to be signed off because theyseeyou as a problem.
3. They Lie About Their Qualifications.
Qualified accountants need to pass some serious exams. Membership of a famous professional organisation is both prestigious and difficult to gain. Some lesser bodies don't require any exam to join.
If your accountant is fudging what they're amember of and how qualified they are, what are theydoing with your accounts?
4. They Lie About How Experienced They Are.
A used-car salesman or saleswomanmay be expected to put the best gloss on what they'reselling. An accountant shouldn't. Theyshould not say they have aparticular niche experience, when they don't. Arethey outsourcing the work?
A personwho knows theirvalue and is upright will tell the truth, even if it makes themless attractive and loses themsome business. It's better to employ an honest bookkeeper than a dishonest chartered accountant.
5. They Don't Know What They Don't Know.
They don't know what they don't know, but they'll try and extrapolate an answer from what they do know. Which will be wrong. Which will lead to delays and arguments.
A good accountant will state what theyknowto be the case, only.
6. They Condone Tax Evasion.
Tax avoidance is legal. Tax evasion, by definition, is not.
A bent accountant can save you a lot of money, for years. Then HMRC bring the hammer down.
A poster in a forum I frequent mentioned casually that theircompany had to fork out £400k because they thought they had a really good accountant, because "they weresaving us so much money!"
Beware if your accountant suggests charging personal items to business expenses or pocketing cash "off the books".
7. They Are Happy To Falsify Documents.
This would be things like backdating company board meeting minutesto 'show' that dividends had already been paid. This is forgery. It is illegal.
8. They Don't Know The Latest Info.
Tax rules change. A lazy accountant is happy pootling along with theirexisting client list. Theymight be thinking about retirement. HMRC doesn't care. It changes its rules every few years. It's important your accountant knows what's allowed now, not three years ago.
9. They Make Small Mistakes.
A few quid here and a few quid there, spelling a name wrong, poor document formatting; these are red flags.
One expects an accountant to be meticulous; the books have to balance.
10. They Fail To Follow Up.
In accounting, you need to persist to the end. Is it sorted, or isn't it?
Just sending off documents and waiting for a response is dangerous inertia.
11. They Are Indiscreet.
Are they telling you about theirother clients? If so, what are theytelling them about you?
12. They Are Disobedient.
An accountant who does theirown thing rather than what you told him to do, and then bills you for the extra work, had better be a financial wizard. Yours probably isn't.
13. They Charge Big Fees And Don't Break Down What They've Done For It.
An accountant should pay for themselves, really, by saving you money. Theyshouldn't be a big overhead, themselves, to theirclients.
14. They Charge Hourly.
This is traditional, but there is an implicit encouragement to take longer on a job.
See if you can get fixed fees or find out why the job is taking longer than it should.
15. They Are Not Technologically Up-To-Date.
They should know what email is and use it.
16. They Tend Not To Keep Their Word.
Do theysay they will call, and then doesn't? Do you have to push themto do things they'veagreed to?
This is the ultimate red flag. You can't sleep easy if someone like this has atetheron your finances.
So, what are the signs of a good accountant?
Basically, the opposite of the above:
1. They are up to date with the latest legislation.
2. They return your calls in good time.
3. They know your niche.
4. They know what you can legitimately claim and cannot claim.
5. They are true to their word!
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