Not all accountants are created equal. Before hiring one, better make sure he is qualified.
What to look for in an accountant
With the increasing size and complexity of Canada's tax code and accounting standards' manuals, it's almost impossible for ordinary Canadians to stay abreast of the rules that underpin their financial lives.
While almost half of all Canadians still manage to fill out their tax returns each year, there's no guarantee that they are doing so in a way that minimizes the tax they pay. As a result, more and more of us are using accountants to help out. The growing numbers of self-employed Canadians are also increasingly seeking accounting services.
But finding a good accountant is easier said than done. A good one can cost fortune, -- ranging from $30 up to $400 an hour, -- and there are so many designations out there, (CA, CGA, CMA and so on), it's hard to figure out who specializes in which branch. Worse, because of the complex work that accountants do, it's hard for a non-professional to evaluate their performance. That means choosing the right person is crucial.
The designation game: CA, CMA and CGA
The country's three professional accounting bodies, --the Canadian Institute of Chartered Accountants, the Certified Management Accountants Canada and the Certified General Accountants - are in a never-ending turf war, often trying to be all things to all people.
On the positive side of the ledger, to be a member of any one of the three professional bodies, you have to have completed at least a university degree, including numerous accounting courses and have completed rigorous professional exams. Tax training is also typically included. But each organization tends to interpret the capabilities and competencies of its members broadly. The qualifications that you seek will depend on what you want your accountant to accomplish.
That said, although all of Canada's CAs have completed an apprenticeship in public practice, only about 40 percent of them work with the public. The balance work either in industry, government or education. Because of their training, CAs will --as a rule-- be the most expensive of all accountants. If you are thinking about hiring a CA, you should make sure that he has a lot of recent experience dealing with the public, especially with smaller accounts.
Certified Management Accountants
While CMAs don't generally work in private practice, most of them should have the basic training to be able to help a self-employed person or small business owner handle their books, prepare their returns and complete regulatory filings. As with CAs, don't hire a CMA for their designation alone. Make sure they have experience in dealing with people like you. Try and get at least three references.
Certified General Accountants
Hire someone that you have a rapport with
Even the best-trained accountant cannot perform well if he considers you too small a customer to be worth his while, so look for someone who deals with individuals, not big businesses. A good flow of information between accountant and client is crucial to ensuring that the relationship works. Look for an accountant who will take the time to listen to and answer your questions, rather than the guy who grabs your shoebox full of receipts, and rushes you out of his office.
Advice: Ask your friends, get referrals
Conclusion: Take a bookkeeping course
Research and anecdotal evidence shows that people who understand finance and manage money well, -- even if they don't have a lot of it, -- are happier than those who don't. So go out and hire an accountant to perform tasks that you can't. But also take a little time to learn how to manage your own financial affairs. It'll be the best time investment you'll ever make.
Peter Diekmeyer (http://www.peterdiekmeyer.com/) is a Montreal based business writer.
|© 2005 Peter Diekmeyer Communications Inc.|