Most mum-and-dad businesses do better with non-chartered accountants says Levertoff

Most mum-and-dad businesses do better with non-chartered accountants says Levertoff

Small businesses are usually better off engaging an accountant who is not a member of NZICA according to Michael Levertoff, of nzaccounting.com.

He says about 50% of all accountants in public practice are not chartered accountants – and that small business customers save money by employing accountants that are not chartered accountants.

“Chartered accountants are often more qualified than non-chartered accountants – which is great when you need that level of expertise, but a waste of money if all you need is basic tax compliance services,” says Levertoff.

And often, businesses will not notice any difference to the services they receive whether or not an accountant is a chartered accountant or not, says Levertoff.

“Complying with legislation is what is important – because that level of compliance keeps you on the right side of the Inland Revenue, and the Companies Office”, he says.

“But chartered accountants have a higher standard than basic legislative requirements because their focus is to ensure compliance both with New Zealand tax law and international financial recording standards.”

Levertoff believes mum-and-dad businesses do not require this level of reporting.

“If I asked most small business how much money you have in your business bank account, who you owe money to and who owes you money, most people know that without having to look at a balance sheet”, Says Levertoff.

He believes only businesses who have different departments where the left hand does not know what the right hand is doing need regular reporting between departments.

“I suggest most mum-and-dad business owners agree that financial statements produced at the end of the tax year add no value to their business and tend to gather dust on the shelf.”

He says this information is expensive to produce, is a waste of time and has nothing to do with tax compliance.

“It’s a myth that is sold to business owners and only profits accountants – but does not enhance the work most small businesses do. I mean, how on earth does an accountant think they know anything more about the plumbing industry than the plumber doing the work?”

Levertoff encourages small businesses to look around and make sure they are getting their tax work completed at the lowest possible price, as with any other service purchased.

“Just like any other service, accountants are there to serve their clients, not the other way around. It is the business owner who does the hard yards. If your accountant does not have this attitude, consider your options,” Mr Levertoff says.