A 31 March year-end is popular. But this may mean your auditor and accountant are squeezing your work into their busiest time of year, with a resultant loss of focus on your business affairs.
Review whether you need your work done at a time of the year when the team working with you is moving swiftly from one job to the other. The auditor or accountant depends on your cooperation and can ill afford it when something goes wrong during the work. Sorting out your problem can cause them issues elsewhere and often leads to extra fees for you. If your audit or accounts happen at a quieter time of year for your accountant, you can use that to negotiate a better fee. This action might mean a year-end change, which may not be possible for some businesses.
Another action is to agree to a timetable for the production of information. Not doing this can create problems right at the outset.
Even when timetables are agreed, are they realistic for you? Can your team produce what they promise in time for the accountant? Failure to meet the milestones may cause problems and additional fees. You must ensure that the timetable is capable of being delivered.
Finally, what about assessing the performance of the accountants? This activity should happen at the end of every audit or accounting cycle. Do this to validate their performance (to confirm re-appointment) and to provide feedback on any issues. In any event, it is best practice to re-tender every three years – and at the most, every five years.
You need this process to judge what else is out there. Are you getting merely a compliance service? You may feel this level is acceptable if you have other skills on the board of directors or from a business adviser to give you what you need.
Or you may want a more proactive service where the advice is ongoing, even if you do not recognise the need yourself!
The larger the firm, the larger the fee is not always the case.
Smaller businesses often use accountants to prepare their accounts when their accounting staff have limited skills. But can your accountants help bridge the gap by training your staff?
VAT can be a big issue, particularly for partially exempt businesses. But does your firm of accountants have someone with the necessary skills? Or are they learning at your expense?
Some organisations use one firm of accountants for the audit and accounts and other specialist advisors for areas like Research and Development tax credits or Capital Allowances.
Whatever the situation, a well-crafted tender request can give you the answers. Be brief because you don’t want a long and complex reply. A complicated approach may even put off certain firms from tendering when they could be just what you need but don’t have the marketing resources that some of their competitors do.
Some of the most effective requests for tender that I came across were less than two sides of A4 but asked challenging questions that were very good at sorting out a shortlist of potential candidates.
Those questions were often based on existing or previous problems and asking the firms concerned how they might have approached the issue. You are not looking for a freebie answer (although you might get one!), but for the process they would go through. This answer will tell you much about the firm.
Ask yourself whether your auditors or examiners are delivering what you asked for. Or something beyond?