Navigating the world of accounting can feel overwhelming as a business owner if you don’t have a good relationship with your accountant or need to solve an accountant dispute. Maintaining an advantageous partnership is crucial to the success and prosperity of any business, so you must take steps towards avoiding accountant negligence by finding someone who truly understands your needs and provides value for money.
Conversely, the long-term consequences can be daunting, and it is not easy to identify a suitable solution.
Table of Contents
What should my accountant be doing for me?
When you first employ an accountant, they generally supply a letter of engagement to specify the terms and conditions for their services. But apart from tax dealings and filing government reports/accounts, what other tasks could your accountant handle?
- Dealing with correspondence from HMRC and Companies House
- Registering the company for VAT when the threshold is reached
- Providing professional references
- General bookkeeping (unless you hire an independent bookkeeper or use in-house staff)
- Providing advice on tax planning
- Administering the company’s payroll, and dealing with Real Time Information requirements
So what could go wrong? As a director, have you ever experienced any of these problems? If so, here are some helpful solutions to try out to steer clear of accountant negligence.
“My accountant is not chartered”
Contrary to popular belief, you do not need a chartered accountant to prepare limited company accounts. As long as the documents are signed off by the directors and meet Companies House’s criteria for submitting them, an unqualified or part-qualified individual can assemble these records.
Utilizing the services of a firm of chartered accountants may provide various advantages, though you should be aware that they typically charge more than unqualified professionals – particularly if you only require them to carry out basic bookkeeping tasks.
“My accountant charges too much”
The fee an accountant charges for their service is often contingent on the business’s design, how orderly your financial documents are organised, and if you conduct any financial management internally.
If you are worried about your accountant’s fees, be sure to take a look at their fee structure. If it is based on hourly rates, then you may be paying too much for services like bookkeeping – which can easily be done in-house if you have the staff with the qualifications and abilities necessary. Investing in financial administration internally will save money over hiring an outside company or professional to do this type of work.
You could also opt for a fixed fee arrangement so that you can stay up-to-date on your accountant’s fees and have peace of mind about the services provided.
“Should I change my accountant?”
If you’ve been unhappy with your accountant for a while, or if an unfortunate mistake has caused financial hardship, it may be time to switch. While this can seem daunting, making the move will ultimately prove beneficial in the long run as finding a more suitable option that adds value is sure to bring rewards. Switching accountants isn’t complicated either!
How to change your accountant?
Searching for an accountant that has experience in your industry is well worth it. Not only could they contribute to making the company more profitable, but additionally, they are able to provide invaluable knowledge and assist on how you can save money through tax deductions and credits.
In the event you choose to switch accountants, you must contact your current accountant to cancel their services and request the vital information for transfer. This will make sure that a seamless transition is made for your new accounting firm or a person of choice.
The incoming accountant will then pen a letter, inquiring if there are any valid reasons why they shouldn’t accept you as their newest client. They shall also ask for all associated documents and paperwork.
“My accountant has been negligent”
If your accountant remains out of the loop when it comes to recent tax changes and provides you with misguided advice or mistakes in calculating what you owe, do they carry any responsibility for professional negligence?
If your financial losses are significant and the other party has acknowledged their mistake, it may be possible to seek legal advice through a court of law for professional negligence. The amount you can receive as compensation is typically determined by if they have professional indemnity insurance or not.
Unfortunately, too many people have experienced accountants who are not dependable and lack ambition. For instance, when their accounts aren’t filed on time it may result in hefty fines from HMRC.
To minimize the risk of HMRC penalties, ask your accountant to provide regular reminders related to key filing dates and other support such as vital financial administrative tasks throughout the tax year.
“My accountant is not up-to-date with technology”
For any innovative business that remains up to date with the newest technologies, it can be a challenge to understand why their accountant still works using outdated traditional methods.
Technology has brought a wave of transformation to the accounting sector, making it essential for accountants to have an informed opinion on which business software can best meet their clients’ needs.
As a business leader, incompatibility between your accounting services and yours can make the corporate dynamic burdensome and disheartening. To discover if they are intending to update their office with new personnel or technology, you should converse with your accountant. This has the potential to bring about much needed change in this area of your professional relationship!
Explaining your concerns is a great way to start, but if it doesn’t lead to any type of progress or understanding on the part of others regarding your tax worries, then finding someone with more expertise may be necessary.
“My accountant does not save me any tax”
Your accountant should be able to navigate the complex tax system and provide informed guidance on how to maximise deductions.
If your company accountant isn’t helping you reduce your tax liability, it could be because they lack the understanding of either your business or sector. By hiring a knowledgeable accountant, you can gain valuable insight into how to lower taxes and maximize profitability.
If you need any advice on your company, please do not hesitate to contact us on 0800 169 1536 or leave an enquiry here. Our friendly team at Company Doctor can offer advice on the above.
