Often when scrolling various social media sites there are posts made by friends and family, perhaps even yourself, looking for recommendations on an accountant. You may see posts like "Can someone recommend an inexpensive accountant?" or "Where can I get my taxes done for cheap?" Inevitably, this generates a variety of responses ranging from "My friend can help you out," to "Buy this software and do it yourself, it's easy!" While many of us appreciate opportunities to save money, Crowe MacKay experts recommend NOT to shop for an accountant this way.
Many of our trusted advisors have been working in the accounting industry for over 20 years and can tell you firsthand that the rules surrounding tax laws and regulations are constantly changing. It takes time and dedication to stay on top of these changes and our tax professionals spend countless hours doing just that. Someone's recommended "friend" may be a cost-effective alternative but likely doesn't have the same time needed to stay on-top of changing legislation. The 'easy to use' software may be a great tool but doesn't always notify you of potential compliance issues or tax planning opportunities. As a result, you could find yourself in an unfortunate situation with the CRA that you never saw coming, potentially leaving you with missed tax savings, pricey penalties, and interest charges - and ultimately could lead to paying accounting fees to rectify the situation.
4 questions to consider when choosing an accountant
When talking about your financial wellbeing it's important to partner with someone invested in creating lasting value for you today and for the future.
Choosing an accountant should be no different than choosing a new doctor or dentist. Find someone you are comfortable with, that you trust, who has a good reputation, and who you'd be able to maintain a long-term relationship with. Some questions to consider when selecting an accountant to partner with:
1. Are they a Chartered Professional Accountant (CPA)?
There is no requirement to have a CPA designation to run an accounting firm and prepare taxes; however, by hiring a CPA you know they are regulated, current on tax laws and regulations, and meet the highest standards in the accounting industry.
2. Do they practice accounting part-time or full-time?
Hire an accountant that will be fully invested in your financial well-being. Consider if 'accounting' is something they do as a side job during tax season or is their career. The less time an individual spends devoted to their practice the less likely it is that they will be current in their laws and regulations. It is also less likely that they'll be able to maintain a long-term relationship with you as they may not offer tax services for a long period of time.
3. Are they knowledgeable in areas relevant to you?
Not everyone has the same tax needs and for this reason, there are accountants that specialize in various industries and areas of taxation- you'll want to consider this in your search. Many CPAs will let you know if your situation is outside of their scope and recommend you to another CPA who has experience and expertise that's relevant to you and your financial goals.
4. Do you get along with your accountant?
You don't need to be "besties" with your accountant and have them over for dinner- but consistency is important when it comes to taxes and tax planning opportunities. If you don't like your accountant, you're less likely to stay with them. Jumping from accounting firm to accounting firm year after year is not a good idea. Just as you want to have a long-term relationship with your doctor to ensure they know your health history to help diagnose potential medical problems, you want the same kind of relationship with your accountant. Your accountant should know your financial history and future plans as this will result in your best possible financial health. (Don't be surprised if along the way you build a lasting relationship with your accountant – we've heard stranger things!).
As Benjamin Franklin famously quoted "nothing is certain except death and taxes." The average life expectancy in Canada is 82 years and most people start filing a tax return sometime in their late teens. Some quick math tells us that we could spend over 60 years of our life filing taxes before our death! When looking at your taxes from this perspective, spending a little extra time to create a lasting relationship with a trusted accountant seems less daunting.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
