Text by Ed Friesen
Why do you need an accountant? Or better yet, why do you need a good accountant? Or even better yet, how do you tell if you have a good accountant?
Most people think the services of an accountant are required only in certain circumstances, such as business startups, business tax requirements, estate planning, or upon the death of a loved one, etc. Others think that accountants are necessary only to prepare personal tax returns and that they have nothing to do after April 30th of the year. Others think that an accountant’s only role is to do the number crunching and prepare the various required tax forms. Actually, the accountant is a professional whose role is far more reaching than most people realize.
Today’s society is full of complex regulations, tax laws, investment possibilities, etc. If you are thinking of becoming self employed or somehow becoming involved in a business, your first resource for information should be a public accountant, much in the same way you should use the services of a lawyer when you purchase a property. They will be able to guide you in as far as sales tax laws are concerned, whether to incorporate or not, help you setup your bookkeeping either in ledgers or on a computer, and help you analyze the business results. They will ensure all of your tax filings are accurate and on a timely basis, help you when seeking financing, and answer the various questions you may have during the year. But before doing any of these things, they should be able to assess your business venture and your abilities and based on this assessment they should recommend as to whether the business venture should be pursued. In the case of a business purchase, they should also be capable of calculating the value of the business to ensure you are not over paying. However, they will not make your decisions, although we do come across some circumstances where the client will not purchase the business without our blessing. A good accountant with sufficient experience will pool the various experiences his customers have had, and use that knowledge to your benefit when possible. Also, remember that a good accountant will appreciate you enough to tell you if your dream is not possible, and if your dream is possible they will be there to help you realize it.
If you are farming, do you need the services of a good accountant or are the services of a tax preparer sufficient? Never has it been more important for farmers to have a good accountant. The current government farm programs require that accountants work very closely with the farmer to ensure that they receive the proper entitlements from all the programs. A simple misclassification of expenses can make a difference of thousands of dollars. We can no longer assume that the calculations made by the government employees are correct. We have also heard of instances where an accountant has told a farmer that the farmer should not bother himself with the programs. What was actually meant was that the accountant did not appreciate the customer enough to do this extra work and to deal with the related frustrations on behalf of the client.
For the farmer and businessperson, another area of increasing concern is the area of estate planning. Traditionally, estate planning has been reserved for events occurring after death. Today when estate planning is done, it encompasses the plan of passing on the farm or business to the children, or of selling the assets, the ensuing retirement plan, the proper distribution of assets after death and of course the minimization of taxes. This is a complex field that definitely requires the advice of many experts including good financial planners that are willing to work with good accountants. Estate planning should not be left for the last minute nor should it be done without consultations with various professionals.
What if you are not in business, you are young, and you do not think you are ready to plan for your estate, you prepare your own tax forms or have a good tax preparer, and do you still need an accountant? Reality is that sooner or later you will need the services of an accountant. It could even be tomorrow. When that time does come, you need to know where to turn, and the present sounds like a good time to explore the field.
Our experience shows us that good accountants will over time save you more money than the fees charged. Bottom line, a good accountant is more like a partner that does not share in your profits but is still looking out for your welfare. Why should you do with less?