Accountants ain’t necessarily accountants…..
I have a client who has a small construction-industry related company. He and his partner had started up the company in small way, from home. He’d met an accountant at a community group he was involved with. He seemed a good bloke, so he trusted him.
The business grew steadily and Sam wanted to learn how to use the bookkeeping software. This is how I met him. My task was to teach him how to set up and use Quickbooks Online to manage his business. Not to do it for him, to teach him how to do it. He wanted to know and understand everything about the business, and needed to control costs too.
For a person qualified in another area altogether, Sam was a good learner bookkeeper. Though he did tend to do things the way he thought he should do them – which inevitably meant more time to undo things. We were going well, Sam was entering his transactions under guidance and I would reconcile his bank accounts and help him prepare his BAS.
At Tax Time, it should have been easy and quick….
Enter this “accountant” at tax time. Well, perhaps the inverted commas are a bit of overkill on my part, he did do the accountant tasks for tax time. He did them by essentially undoing everything that had already been done, and did it all “his” way. But I’m a record-keeper from way back, and when I started to suspect things were being changed, I could go back to confirm.
He created his own accounts and changed transactions that were already classified properly. He created separate income accounts for interest from two different bank accounts. He separated the bookkeeping fees from the Accounting fees. He changed the names of accounts. The worst thing he did, though, was to create new GST tax codes, because he didn’t understand the report that the software prepared. He changed every single supplier card to his new tax codes.
He did this all himself, in the name of calculating the client’s tax obligations. Messed up the software’s system for calculating BAS. He was surprised about that, though.
As I was discovering each of these innovations, I would let the client know that there seemed to be a lot of unnecessary change being made to the data file. At first Sam was interested, but not particularly concerned, but over time he became very concerned about what was happening.
In my educated, qualified experienced opinion, not one of the changes was warranted.
Now I may be operating a business as a bookkeeper (the basis of accounting, by the way) but I have years of experience coming off a 30-year career in finance and accounting including supervising graduate accountants so I know when what I’m looking at is wrong.
So what happened next…
The kicker came when it was time for him to write his invoice. Strangely, his fee was almost the exact amount of profit they’d declared. More than 3 times what other accountants would charge for the same work. He’d spent hours and hours doing things to the client’s file that was completely unnecessary.
But most clients wouldn’t have known that. Boy, was he rude when told he wouldn’t continue as their accountant.
The moral of this story is don’t just blindly trust a professional without really understanding their advice, the value-add they provide and the general business guidance you get from them. They are not all the same. They are not always right, and sadly some of them you shouldn’t feed. If you don’t understand something, ask.
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If you want real help and advice, you can Ask Valerie too, call me on 0437 336 574 or email me at email@example.com