Having spent more than two decades in public accounting practice, I have come across many accountants in my travels. I work with many accountants collaboratively to achieve mutually beneficial outcomes for our respective clients, and work against many accountants on the opposite side of the table.
Over the years, I have developed a checklist of the reasonably reliable markers of a good accountant, along with the red flags that come with a not-so-good accountant. Here, I would like to share with you some of the key items on that checklist to assist you in finding a trusted advisor who can help you weather the ups and downs of property investment.
GOOD SIGNS OF A GOOD ACCOUNTANT
- They are a property specialist
It is fine to consult a GP if you have the common cold, but if you have a specific health issue you will want advice from a specialist who knows everything about the issues that are relevant to the specific area in which you require assistance. Your financial and tax affairs are the same. If you are a property investor, it would be sensible to engage an accountant who is well versed in property matters.
This is not to say that accountants who are not specialists in property are not competent to provide you with good advice. However, you certainly do not want them to charge you for the time they need to educate themselves on how the law specifically applies to property transactions.
They take a holistic approach A good accountant always looks at your affairs on a holistic basis and considers the big picture.
For instance, instead of just looking at how a particular structure for a property investment may benefit you from a tax perspective, a good accountant also looks at how the structure may affect other aspects of your life. For example, does the structure provide asset protection by quarantining your valuable assets from risk? Does the structure facilitate a commercial and tax-effective exit strategy?
The holistic approach also extends to other services that are relevant to your needs. This is why a larger accounting practice that offers a good depth of service may sometimes be a better choice, because your trusted advisor will have access to other in-house specialist services that you may need throughout your life stages.
- They offer proactive advice
You don’t know what you don’t know, so it is very important that your accountant prompts you to provide information beyond the scope of your query, which may proactively bring up issues even before you know they exist.
A good accountant will ask many probing questions and try to understand your circumstances as thoroughly as they can because they need sufficient context in order to do their job well.
To that end, a close relationship that facilitates regular contact with your accountant is critical as it gives them opportunities to ask the right questions and identify any hidden issues that you may not be aware of. This type of relationship is a two-way street – you need to be ready to pick up the phone and call them when things crop up, and they need to proactively provide timely information if there are changes to the law or the environment that may affect your affairs.
A good accountant is not only open to engaging in this manner but actually prefers this type of client relationship and engagement approach, as opposed to being the person you dread to see at the end of the year just so that you can get your tax returns done.
- They are willing to disagree
The whole idea behind engaging an expert is for them to tell you something you do not already know, so if you find your accountant reluctant to disagree with your views, you may need to reassess to see if they are adding as much value as they possibly can. A good accountant is tactful without being agreeable.
Having said that, sometimes people need social permission to know that they can disagree with you, so you can make this one of your ground rules when you first engage them. You may also encourage constructive disagreement by regularly and actively asking your accountant for their views and whether they agree with yours.
- They have their own professional network
A good accountant belongs to your local business community and has their own network of professionals with whom they regular work, consult, and share ideas. A good accountant who specialises in property matters comes with other professionals such as lawyers, real estate agents, town planners, architects, builders, etc, who also specialise in property matters. By engaging the accountant, you immediately gain access to a network of property-savvy professionals who may collectively service all of your investment property needs.
NOT-SO-GOOD SIGNS OF A GOOD ACCOUNTANT
By far the most common complaint I hear people make is about their accountant’s lack of responsiveness and communication.
If you make contact with your accountant and do not hear back from them within 24 hours, or 48 hours at most, then you have to wonder how efficient and effective they are in approaching your work.
With all the technology available to us in this day and age, there is really no excuse for unresponsiveness, not to mention that sometimes you simply cannot afford to wait when an opportunity knocks on your door.
- Cheap and cheerful products
I am always wary of accountants who sell their services like an off-the-shelf mass-produced product. This type of accountant tends to provide their clients with a one-size-fits-all approach by productising and homogenising their service offering, which is appealing because it has a cheaper price tag than everyone else’s.
There is absolutely nothing wrong with a more economical solution, but a homogenous approach can potentially mean that you are not getting a tailored and customised solution that is optimal for your needs. While you may save on professional fees, you may also be paying for this by getting inferior service.
On the other side of the spectrum, you cannot help wondering if an accountant who charges you for every six minutes and every phone call really has your best interests in mind. After all, your relationship with your accountant is like any other relationship, which requires both parties to give and take.
Yes, a professional with specialist skills should be entitled to fair compensation for their services and for the time and energy they have taken to educate themselves and acquire those skills, but an accountant who is generous with their time is a good sign that they truly care about you and want to get the best outcomes for you.
There are accountants out there who stop learning once they have gained their professional qualification, and there are those who continue to exercise their intellectual curiosity and see their career as a continuing educational opportunity.
Beware of the former type of accountant because, while they seem to get by relying on common sense and intuition, not keeping up to date technically in this complex modern world could limit their problem-solving tool kit and might ultimately cost you if you engage them.
I am not saying that your accountant needs to know everything there is to know about their sphere of practice and expertise, but if they are committed to continual professional and technical education it is more likely that they will be regularly looking for new ideas and solutions that keep up with the evolving market, and that will ultimately benefit you.
Just as technical deficiency is suboptimal for your needs, an accountant who is the proverbial ‘know-it-all’ should also ring alarm bells. There is a difference between an accountant who is technically brilliant and one who has the gift of the gab. Unfortunately, it is not always easy to distinguish between the two.
In the end, I would much prefer an accountant who needs time to consider issues carefully and think things over when confronted with an issue than one who conjures up magical solutions off the cuff. It is much better to have a well-thought-out piece of advice than instant advice that lacks depth and misses the mark technically.
Ironically, the way an accountant deals with an error is a good telltale sign of whether they are a professional of substance or a great salesperson.
A good accountant tends to be introspective, forthcoming, ready to take on responsibility, and will try to solve the problem caused by their error, while a not-so-good one tends to try to talk their way out of any wrongdoing and of assuming any responsibility.
My advice is that you would do well choosing character over quick wit every time.