Employing an accountant and paying accounting fees are a normal part of business for most people. However, rather than focusing of minimizing accounting fees we believe that you should be focusing on getting the best value.

For example, let’s consider two different scenarios:
Scenario A - your accountant charges you say $3,500 pa for accounting fees and makes some business tax or investment recommendations which you implement. As a result you earn an additional $10,000 pa of income after tax.
Scenario B – your accountant charges you say $2,500 pa for accounting fees but gives you no advice as to how to improve your business results or investment strategy.

From which accountant did you get the better value? Obviously the first accountant charges more but gives better value.

Some tips on getting value from your accountant:

• Ask your accountant about the best computerized record keeping system to use and get them to help you set it up correctly. Get training if you need it.
• Keep your business and tax records complete and tidy by filing all invoices, bank statements, cheque books and deposit books etc using a consistent and methodical filing system. Missing records increase your accounting costs. StreetSMART provides their clients with an annual records folder to assist with this.
• Pay business expenses from the business bank account by cheque, EFTPOS, direct debit or business credit card. Minimise cash transactions and personal drawings from the business account – it’s better to transfer a regular lump sum from the business bank account to your personal bank account for personal expenses or go on a PAYE paid salary and do not take drawings from the business. Keep business and personal finances separate.
• Bank all business income to the business bank account. Minimise unnecessary transfers to and from bank accounts. Avoid doing contra deals – if necessary cheque swap instead. 
• Talk to your accountant before you do business deals to ensure you approach things the best way. Many additional costs are incurred to “fix up messes” created by badly structured business deals that lacked forethought and clarity.

• If you are no good at the accounting side of things, recognize that and delegate to some one who is. This could be an employee, a good book keeper (such as an Office Champion – www.officechampions.co.nz or your accountant. Don’t try to do something you are not suited to and are not interested in. It will end up costing you money.
• Stay up to date with the IRD. File GST returns on time and make tax payments when they are due or be proactive in getting an IRD payment plan in place if necessary. 
• Talk to your accountant regularly and ask them for tips to improve your financial results. If you don’t ask, then your accountant may think that you don’t want advice! 
• You are likely to get the best value from using different members of the accounting team appropriately. For example, the day to day accountant should be able to advise you on record keeping, tax deductions, tax payments etc. But you will most likely need to consult with the partner or director regarding business or investment strategy, complex tax planning or structuring and so on.

And remember, your business and financial affairs are too important to put at risk. Don’t be tempted to save a few hundred dollars by going to a “cheap” accountant, because it is sure to cost you in the medium to long term.

Instead, focus on keeping your affairs neat and tidy so that your accounting costs are minimized. And use your accountant proactively for advice, rather than just number crunching. That’s how you’ll always get the best value from your chartered accountant.