Three reasons to fire your accountant - immediately please
Sole proprietors (SPs) and micro, small and medium enterprises (MSMEs) typically hire accountants to help them handle all the clerical stuffs ranging from tax filings, payroll processing, payroll tax filings and bookkeeping — these are the traditional jobs that SPs and MSMEs “outsource” to their old trusty bookkeepers or “accountants”. However, it is time perhaps that SPs and MSMEs begin to question if that is what they want.
Admittedly, the accounting profession have proliferated (not boomed) and almost 1 in 2 accounting graduates taking the board examination gets to qualify as a CPA. It is alarming that in my more than 3 years stay in the Philippines, it can be seen that the quality of incoming new CPAs is deteriorating. Further, there is a rampant growth in lightly experienced accounting professionals jumping ship to start their own accounting practice without much exposure to the c-suite level of accounting practice (which is more focussed on advisory).
It is difficult to judge whether you’ve got the right man for the job, however, there are three things for you to note to decide if your accountant is worth your time. I won’t be saying what they should be doing, for now, let’s focus on what’s to avoid.
1. Tax evasion is their expertise, internal connections are their key
The small practice firms in the country is dominated by accountants who’s got a bunch of connections within the local RDO and they can get you out of any tax trouble as long as your money can hit the bull’s eye. Then, happy are they who help you, for they share the profit from their help. They’ll teach you to buy receipts for a percent of the receipt to save you 11% from VAT (12% VAT less 1% cash purchase price), they’ll teach you how to maintain two sets of books — fantastic — God knows that they also whistle blown you to the BIR to get some share in bribe.
2. Send them everything, they’ll do the magic
I always wonder how the fixed asset account of our business’ was determined by the accountant when I was young, till now it is a wonder. Every month, your accountant’s clerk (not your accountant) will come to pick-up all the documents they need to file for tax return — oh yes, just for tax return — who cares about financials anyway?! That’s the end of your communication. Quick, fast, reliable.
3. Negotiation is the time to talk, else, shhh
Have you ever wondered what your accountant is actually doing? You only hear from them once a year when you have to renegotiate your retainer fee. Ah, I forgot — you also hear from them first when you get your letter of authority (seems creepy at times that they knew it before you do — oh well, surprise surprise). You don’t really get much, if any, insight at all. You just talk money, money and MONEY! Next time, try to ask them a bright question such as how the economy is doing — and you’ll be surprised once again!
These are anecdotal tales from my experience back in the Philippines, they’re fun — at the same time — they’re shameful.
