Accounting Q&A

The short answer is no. While highly recommended, it's not mandatory. The extent you need an accountant (or any other professional service provider) will depend on your type of business, revenue, structure.

For example, if you're running a hobby business out of your garage while employed full-time, you might simply need a bookkeeper.

If however, you intend to build a company servicing other businesses or the general public, I strongly suggest you seek a good team of advisors immediately. It will be an investment well spent.

If in doubt, err on the side of caution. Talk to an expert and discuss the business model before starting, if only to find out what you do and don't need.

When you eat in McDonalds Restaurant in Melbourne or in Shanghai, you have the expectation that the Big Mac will taste the same.  In the same way, if you're using a franchise such as H&R Block, you can expect the same level of standard whether you use them in Melbourne or Perth or Hong Kong.  Small accounting firm that is local to one city or a few cities in a country can have a higher level of standards than H&R Block but the key is that you don't know the standard until you engage them whereas if you're already using H&R Block in one city and you open a new business in another city, you can expect the same level of service you're currently getting.  

I have to say Paul that I disagree with your comment above. We provide corporate secretarial services among other things, and we don't have monthly retainers. Also, most accountants outsource their work to us, so the client ends up paying for our services plus the accountants services on top. Not always, but often. So if an individual knows what business structure is right for them, and if they have received advice from someone qualified to give it, using a corporate service provider may be cheaper. It's also cheaper in the long run than going at it alone through ASIC. We know the questions to ask and we catch costly mistakes before they happen. And, as you said, if we become your registered agent, you are reminded of annual reviews in time and all forms are completed and are compliant. In terms of DIY and everything being done online, it's a bit of a catch 22. Yes you can do it online, but have you tried calling ASIC with a question in the last 6 months? They are impossible to get through to, so forget it if you have a complicated issue or a mistake has been made. So in summary, yes it is always recommended to speak to an accountant, lawyer or financial advisor, and once you've got your structure you can set up through a trusted and thorough third party provider and save yourself hassle, time and money. 

If your business is registered for GST, you are required to lodge a BAS regardless of whether or not you have anything to report for that quarter. If you have nothing to report, you can lodge a 'nil' BAS online or by phoning 13 72 26 - this is an automated service that can be used 24/7 as long as you have your BAS document identification number (DIN) to hand. 

I would also add a different perspective. I think there are 3 things that help boil down a choice for this decision.

1. Cost - are you looking for free (there are options), low cost, high cost. Obviously high cost solutions usually have much more flexibility and can be custom fit to your needs. However, if you are just starting out you may not have a large budget. Do you want to be a 1-time license or are you okay with a host option that has a recurring monthly fee?
2. Integration - not all products are equal if you need your accounting system to integrate with your CRM or your e-commerce system or HR. Consider what you really need to make your operations seamless. A system with integration flexibility can definitely save you time and double entry.
3. Bookkeeper or Account - if you already have a trusted accountant what software are they familiar with? Which do they prefer to use and why? How will it fit your business? If you have a trusted person in mind, it may be easier to use what they already know, but still ask about options. Hopefully they can guide you to the right solution if you are unsure.

I would say that it very much depends on the role that the client is looking to fill and the size and budget of the client's business.  What does "anonymous" want the accountant to do?  Is it a matter of a small business hiring someone to do bank reconciliations and run reports?  Or is it a large business requiring budgets and board reporting?  Or is it a matter of finding an external accountant to provide advice and tax reporting?

CPAs and CAs usually are expensive to hire, so you would want them to be filling a role that their qualifications justify.  You wouldn't want them in a role that a bookkeeper could perform.

IAS is usually an Instalment Activity Statement and not an Income Activity Statement.
See https://www.ato.gov.au/Tax-professionals/Prepare-and-lodge/Tax-agent-lodgment-program/Obligation-type/Activity-statements/

These are the following statements that are required to be lodged with the Australian Taxation Office
PAYG Instalment Activity Statement
(Pay As You Go)
Paid Monthly or Quarterly with the Business Activity Statement
Quarterly Instalment (Form R)
Quarterly GST Instalment (Form S)
Quarterly GST and PAYG Instalment Statement (Form T)

 

There are a few different ways to lodge your BAS, but lodging it online or hiring an accountant, bookkeeper or BAS agent to do it for you is generally the easiest and most efficient way.

If you lodge your BAS online, you can do so either via your my.Gov account (only if you're a sole trader), through your online accounting/bookkeeping software or via the ATO's online business portal.

While you can lodge your BAS by mail, it takes a bit longer to complete and send the paperwork. There's also no risk of your documents getting lost in the post! If mail is your preferred method you'll be sent a pre-addressed envelope in your BAS package. 

If you have nothing to report for the quarter, you still have to report this to the ATO and lodge a nil statement. You can do this online OR over the phone on 13 72 26. 


 

Hi Paul,

As a former accountant (graduate) and former financial planner (graduate) it really does depend on what you need advice on and whether the advice is for a business or your personal financial affairs.

In my experience, accountants are well equipped to deal with most things related to helping businesses. Sure they prepare your personal tax return and may give a hot stock tips, their training and qualifications is focused on helping businesses - corporate strategy, tax planning, etc.

Financial planners/advisers are the best professionals to help you with your personal financial situations such as super, investments and insurance just to name a few.

My comments are based on the big picture, however their will always exceptions where  some accountants provide personal financial advice and where some financial planners provide advice on business.

Just a note, you should make sure that the accountant or financial planner you go to is legally licensed to provide the advice the he/she is giving you.

Hope this helps

Cheers

Nikhil
Founder & CEO
ProAdviser
An online marketplace where Australian consumers can get quotes, compare and and contact a financial adviser, broker, accountant or lawyer.