Signs it Might Be Time to Change Accountants
The end of the year is a time of review and evaluation for many business owners. It’s an excellent time to review company sales performance, new product/service development, customer retention, and production efficiency. Concurrently, it’s also essential to evaluate employee performance, expected changes in staffing needs, equipment upgrades, and reviewing the latest budget for next year. As part of the year-end process, it’s also necessary to evaluate suppliers and vendors to determine if the highest level of value is being received. For some, it’s an easy decision because it’s about competitive pricing on materials and supplies, but for others, it can be more challenging. Reviewing the accounting relationship is one area where it can be challenging to know if a value is being received. Most business owners will not make a change until a significant issue arises because they are unsure what to expect from their accountant. To help clients, prospects, and others, Klatzkin has provided the following list of key signs that it might be time to change accountants:
- Lack of Communication – Since each business relationship is different, it can be challenging to know what to expect in terms of communication. At a minimum, your accountant should answer questions and return calls in a timely fashion. Questions should be answered in a straightforward manner and complex concepts, when appropriate, explained in basic business terms. Beyond responding to requests, your accountant should be proactively communicating about tax changes, opportunities for savings, and other important updates. If the amount of interaction is limited to when tax deadlines are approaching, or there is little discussion about changes to your business/personal situation, it’s a sign, and it’s time for a change.
- Penalties – From football to taxes, no one likes to receive a penalty. This is especially true when it’s your accountant’s action that resulted in the penalty assessment. If your accountant has made one or more errors that have resulted in missed opportunities or penalties, it’s a warning sign. The reality is that a good accountant is deadline-driven and detailed oriented as these characteristics are essential to success in the industry. If your current provider is continually making mistakes, whether they result in penalties or not, it raises questions about their ability to guide the company. It’s also a sign that it’s time for a change.
- Estimated Tax Issues – A critical role many accountants play for many business owners is the calculation of estimated taxes. It’s essential to understand overall tax liability and to ensure necessary payments are made throughout the year. When estimates are regularly too high or too low, not only does it make tax planning difficult, but it can leave you in an unexpected position at year-end. Accountants need to regularly review company books to identify variances in income and expenses to estimates are accurate If your accountant has issues calculating estimated taxes, it’s a sign that it’s time for a change.
- Proactive Tax Planning Ideas – Throughout the year, the IRS and other regulatory agencies are continually making changes to tax law or guiding how it should be interpreted. This information is essential in determining the saving opportunities available to taxpayers. This is valuable information because businesses may be in a position to take advantage of these opportunities. However, it’s impossible even to make an informed decision when your accountant fails to share such information proactively. If your accountant doesn’t offer proactive tax planning ideas, it’s a sign that it’s time for a change.
The decision to make a change can be difficult, especially if the company has been working with the same accountants for many years. While there are often concerns, or even fears, about what the change may bring, it’s essential to recognize the cost of not acting. Insight-driven accounting advice and service can not only result in tax savings but can also impact when new equipment purchases or other expenses are made. In other words, the cost of not changing often far exceeds any perceived challenges.
Over the past two years, there have been significant changes made to tax laws through the Tax Cuts and Jobs Act of 2017. This tax reform has created the opportunity for taxpayers to reassess their approach. If you have questions about taxes or think it may be time to make a change from your current provider, Klatzkin can help. For additional information, call us at 609-890-9189 or click here to contact us. We look forward to speaking with you soon.