Mark Lee shares a personal view of issues and qualities that may be holding you back.
Let us be clear before I get into this list. It’s just my view. It’s not about efficiency vs inefficiency, nor about old-style vs new-style and it’s certainly not about qualified vs unqualified.
You may think some of the qualities listed below are obvious – but you may also be surprised how easy it is to fall into the related traps. Or you may disagree of course. In which case, by all means add your comments and we can discuss them.
Equally, if you think I have missed anything from the list, please add that too.
So, in my opinion, what do bad accountants do?
1 - They misrepresent their qualifications
Why should anyone trust an accountant who claims to be qualified when they are not, or who claims to be a member of a body to which they do not belong.
What about those who claim that membership of a particular group or body constitutes a qualification even though membership does not depend on a period of study or exams?
2 - They claim to have more experience than they do
Again this speaks to the issue of trust. There is a big difference, in my mind, between those accountants who offer a wide range of services knowing that they will outsource some work, compared with those who pretend to be more experienced than they are.
Some accountants may feel insecure about their limited experience; others have the confidence to be open, honest and truthful.
3 - They are unaware of what they don’t know
This is more a consequence of ‘unconscious incompetence’. If an accountant doesn’t know what they don’t know, they won’t know when to stop and get a second opinion before telling a client what to do or when predicting the outcome of their dispute with HMRC.
This is dangerous and often leads to protracted negotiations with the accountant trying to resolve things the way they predicted even though a specialist would have known better from the outset.
How does anyone know what they don’t know? It’s more a question of getting a good balance between:
(a) Confidence that we have a good broad range of knowledge on a specific topic, and keeping uptodate so we can expect to be aware of recent changes, and
(b) Simply assuming that we know everything and failing to attempt to keep up-to-speed on recent developments
4 - They wing it
There’s a difference between following your gut and guessing how to resolve a client’s issue. Past experiences will invariably impact the advice that accountants give clients. The mistake comes when an accountant recognises that their experiences to date are insufficient but that they will extrapolate and give definitive advice anyway, without checking up first and without any caveats.
5 - They condone tax evasion
This may be more challenging than it seems. It includes knowingly allowing clients to exclude cash takings from their books and to claim tax relief for non-business related (personal) expenditure.
6 - They falsify documents
This came up a lot when I used to present talks on ‘How to avoid professional negligence claims (or worse)’. I outlined some of the implications of the Forgery and Counterfeiting Act 1981.
Among the offences this Act addresses is making a false instrument (eg a document) with the objective of inducing a third party (eg HMRC) to accept it is genuine so that they will do something (or not do something) to their own or to somebody else’s prejudice.
This would include, for example, backdating the minutes of client company Board Meetings to ‘evidence’ the authority for dividends already paid.
7 - They fail to anticipate the advice their clients require
This is a simple client service issue. I’m not suggesting that all accountants need to know everything about all their clients. This is more about recognising that clients do not always know what they need to ask for advice about. Auto-enrolment would be a topical example.
8 - They do not keep up-to-date
There is no excuse for this now, if ever there was. Much of what accountants need to keep up-to-date is now available by way of email updates, websites like AccountingWeb, online newsletters as well as the more conventional training course providers who offer webinars as an option alongside classroom style lectures and updates.
9 - They miss deadlines
10 - They ignore clients
Almost every practice has at least a few old clients who pay a little and expect a lot. It may be tempting to ignore them when they get in touch, especially when the accountant doubts their ability to secure adequate recompense for this latest enquiry. Better to be honest though and avoid getting a bad reputation.
11 - They spend more time with prospective clients than with paying clients
Perhaps this is simply a case of poor practice. I’m talking about accountants who make plenty of time to meet with and even give advice to prospects, but who rarely have time to meet existing clients – at least not without wanting to charge for this.
The reason this is on my ‘bad signs’ list is because it implies that the accountant is more focused on growing their practice than on giving a good service to their existing clients. There needs to be a reasonable balance in my view.
12 - They boost their time-based fees by being inefficient
Another issue of trust. The facility for accountants to charge more when they are inefficient is one reason why so many clients try to avoid paying time-based fees. Sometimes the accountant may not even be aware they are inefficient; after all there is no incentive to find faster ways to do things when paid by the hour.
13 - They do not clarify the scope of the work they will do
Client service again. Often there will be a perception gap as between what the client expects and what the accountant is willing to do – without increasing the fees.
Even worse are those accountants who undertake the extra work but do not raise the question of additional fees until afterwards.
14 - They reveal a lack of attention to detail
When I was training at Touche Ross in the early 1980s I recall one partner returning to me a letter I had drafted and sent through for signature. He had spotted that the postcode on the envelope was different to that on the letter. I have always remembered the admonishment.
Lack of attention to how we address letters implies a general lack of attention to our work which reduces our credibility and that of our advice.
15 - They blame HMRC to cover-up their own inefficiencies
Another trust issue. Bad accountants have such low esteem that they are unable to admit when they have made a mistake. It’s all too easy and lazy to blame HMRC even when the accountant is the one in the wrong.
16 - They fail to follow up
One of the complaints I often hear is that an accountant hasn’t followed up after sending papers to HMRC (or any third party). They just sit and wait and do not keep the client informed as to what they are doing.
A similar scenario arises when the accountant hasn’t responded to a client’s query or request for action.
17 - They do not keep their promises
It’s easy to lose a client’s trust. Simply promise to do something and then fail to keep your word. That’s true of all human relationships, of course.
18 - They have insufficient back up and business continuity plans
Whether an accountant relies on the cloud, computer servers in their office or a hosted solution it is crucial they have adequate back up processes in place. Beyond this is the need for the accountant to have a plan to enable them to access all client data etc in the event that physical files, the primary software or online storage facilities cease to be available.
19 - They are indiscreet – whether face to face or online
There is no excuse for breaching client confidentiality, however tempting it may be sometimes. Doing so also breaches one of the five ethical principles that drive the work of most qualified accountants in the UK.
20 - They work entirely alone
I worry about accountants who have no colleagues, back-up, support, or readily accessible facility to provide any of this when needed. Working entirely alone with little day to day communication beyond clients and HMRC is likely to cause accountants to become quite blinkered, dogmatic and insular. Indeed such an approach could well lead to many of the other qualities listed above.
Bad accountants invariably have or generate a bad reputation. I wouldn’t care but for the impact this has on the rest of the profession.
Mark Lee is consultant practice editor of AccountingWEB. He also facilitates The Inner Circle group for accountants, entertains as a conference speaker and is chairman of the Tax Advice Network of independent tax specialists providing help and support to smaller practices.
Mark Lee will be speaking at this year’s Practice Excellence Conference on 6 November at Dexter House in London.