With tax season in full swing, many people have been (or will be) contacting their accountants to get their taxes done. Whether you own a small business or just have your personal taxes prepared by an accountant, there are a few things your accountant likely isn’t telling you.
Related: How Does CRA Decide Who To Audit?
Preparation Pays – Literally
One thing you likely won’t hear from your accountant is that being prepared and having all your documents in order can, and usually does, pay off – literally.
Aside from a fixed-fee arrangement (usually not common), accountants charge their clients based on the time spent working on each arrangement. The more time is spent preparing documentation, redoing calculations, tax planning, reconciliations and verifying amounts with CRA – the more the client will be charged.
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Any client can likely reduce their accounting bill by doing the following simple things:
- Have all documents in hand and ready to go. The more time is spent communicating back and forth asking for missing documents, the more time it will take (and money). If you’re not sure exactly what you need – ask your accountant. Many firms have a list of required documents you will need
- Own a small business? Consider doing the bookkeeping yourself. This is a task that is usually delegated to a junior accountant within the firm and although their rates are usually lower, the time still does add up fast. If the bookkeeping is too difficult, just make sure to have all the records handy to make it go as smoothly as possible
- Be sure to explain any changes from the prior year. If you usually have your personal taxes prepared and your life situation has changed (ie. new baby, looking after an elderly parent, etc) be sure to mention this up front. These things lead to lots of tax planning strategies that your accountant can use to save you money
Related: How to Fix Tax Return Errors
Some Clients are Favoured Over Others
Like any other professional service, some people are easier to work with than others.
Clients who miss scheduled meetings, are difficult to reach if any questions arise, are missing key documents and set unrealistic expectations are all likely to be treated less favourably than others.
If you need your personal taxes prepared, keep in mind that some firms have a cut-off date for accepting personal tax returns – and it is likely earlier than you think.
April is the busiest month of the year for accountants filled with tons of overtime, 6 days of work per week, lots of pressure to meet all deadlines and a never-ending workload.
Most accountants strive to give the best service possible, so anything that can help them do that is beneficial for both parties.
Clients can make it easier by setting realistic expectations about the turnaround for what they need, being easy to reach in case anything comes up and providing as much information as possible.
And homemade baking usually helps too 🙂
Fees are Negotiable (Sometimes)
Accountants charge clients based on their time. What many clients don’t realize is that their fees can be up for negotiation in some cases. If a significant amount of time was spent on a task that should have been done more efficiently, some firms will write-down the total invoiced amount for their client.
Long-time clients are also given discounts occasionally based on what the total billings were compared to prior years.
Like every other professional service, rates generally do increase over time but your accountant likely wants to retain you by ensuring the rates are reasonable given the services provided.
Ethics Won’t be Compromised
Accountants are held to a high standard for a reason – they need to use professional judgment based on the information they have in areas that are sometimes considered ‘grey’.
Fees may be negotiable, but your accountant definitely won’t negotiate on ethics surrounding your situation.
Asking an accountant to ‘bend the rules’ or ‘look the other way’ in a situation they perceive as unethical will lead nowhere fast.
Accountants do strive to provide the best service possible – within current laws and regulations. They are required to follow the guidelines set out in their professional institute and will never want to be associated with a situation they perceive as unethical.
Conclusion: clients can usually lower their accounting bills by being prepared and doing some of the light work themselves (like bookkeeping). Fees may be negotiable but ethics definitely aren’t.