Getting the Most Out of Your Professional Tax Advisor

One of the first questions I ask a new prospective client is “Why do you wish to switch tax advisors?” The most common complaint is that there is a lack of proactive tax planning from the current advisor. The second common complaint is late filing penalties and interest fees. More specifically, the taxpayer often complains that the current tax advisor has been unresponsive to a tax planning request or has been too busy to make the client a priority.

After being in practice for many years now, I no longer take this complaint at face value.

Professional accountants do get busy, especially during tax season which stretches for months from January to the end of June of every year. There are just too many filing deadlines during the first half of the year and the filing requirements for all organizations are also increasing constantly. Profit or non-profit, profitable or struggling, incorporated businesses or otherwise – all have more filing requirements than just a few years ago.

Having said that, accountants are generally a very responsible and highly responsive bunch. I know for myself (and most of my colleagues) that timeliness and follow up are critical to the client’s success, and your success is the core of our business. So basically, business owners who feel that they are not getting timely strategic tax planning advice need to assess the following: is it you or the advisor?

For a majority of Canadian small business owners, a good tax plan is not difficult to develop. Often, it involves a handful of common strategies with some custom tailoring according to the business’ needs and goals. Examples would be: income splitting, dividend sprinkling, tax free rollovers, optimizing capital gains exemptions, and the optimal use of family trusts. Coming up with an optimal tax plan also requires a bit of time and an investment in both an accountant and a lawyer to assist you in doing it in a way that protects you, saves you the most money, and optimizes your business operations in the long run.

After giving “legal effect” to a tax plan, the details of the plan need to be implemented, scheduled, and executed. Task examples include setting up a new bank account for the new holding company or family trust; paying out dividends to new shareholders, the holding company or beneficiaries; and providing timely financial statements to the tax advisor so that all the compliance filings can be done on time. In other words, the successful execution of the tax plan needs to be incorporated as a priority into the client’s day-to-day routines. And this is where a handful fail – quite likely the same handful who are not satisfied with their current advisor.

Drafting a tax plan is akin to buying a new pair of runners and a fitness outfit. After that, you still need to show up to the gym and put in an ongoing effort to retain ongoing benefits. That is the execution part. The trainer can’t go on the treadmill for you every day just like the accountant can’t manage your business operations every day.

So before considering leaving your current advisor, try and recognize your own bad habits (we all have them) and strive to be aware of your business operations, both as a tax client and an entrepreneur. The famous saying “Luck is where preparation meets opportunity” definitely applies to optimal business tax health – if you come to the task highly prepared, we can come to the task highly informed and help you foster endless tax opportunities and ongoing successes for your business.

For a comprehensive list of our corporate consulting and tax planning services, visit our website today. If you have any questions or would like to know how we can help you, contact us.

Disclaimer: All Rights Reserved for Mew & Company. This blog post is designed to provide information for personal use only. Please consult your professional tax advisor for further information. Mew & Company is not responsible for any legal disputes resulting form the content of this blog post.