One of the most endemic ‘business practices’ with Type 1 (Reactive) Accountants is the way they charge for their expertise and service. They charge you on a ‘time basis’ (after the work is complete) and based on who worked on your job and how much time they took will determine the amount they charge you. It’s a really bizarre way of doing things. The assumption (to get to the price) is that the time taken was correct and the price per hour was correct – and nothing could be further from the truth
With this ‘time billing’ practice (where the price is set at the end of the work) the firm is directly rewarded for making mistakes and going slower. You pay more the more inefficient they are! I do not think that is fair on you. I would imagine that you, (like most businesses), offer an agreed price for your product or service before the customer agrees to buy. But Type 1 (Reactive) Accountants continue to charge you whatever they want and you have to pay it. And you know how that feels — it’s like a grudge purchase every time.
Against that, consider the way the Type 2 (Proactive) Accountants work with you. They give you a fixed and agreed price before the work begins. You have a chance to understand the value they are adding and the scope and price of the work before it starts. It’s a fairer (and some would say) more ethical way to do business.
Accountants have a lot to offer. They are (in the main) very smart people and many are experts in finance, profit improvement, asset protection, cashflow enhancement and tax minimisation.
It’s really simple for you to decide what sort of Accountant suits you. If you are content with your financial position then pick a Type 1 Accountant. If you are not content with your current financial position then pick a Type 2 Accountant.
When you have the right Accountant they can seriously improve your financial position. For example, in my case I switched (4 years ago) from a Type 1 (Reactive) Accountant to a Type 2 (Proactive) Accountant and my net wealth has increased dramatically – and my new Accountant played a big part in that increase. I am not an isolated case. Many of the Type 2 firms I get to deal with cite case studies of how they have helped their clients become wealthier.