In order to succeed in business in Israel, you need a valuable product or service, marketing, sufficient manpower and an accountant. You may have heard tales of people who do their own accounting, but these are generally mathematically-minded, detail-oriented people with one-person small businesses. For most of us, an accountant is crucial for staying compliant with reporting and paying the right amount of taxes, Bituach Leumi and pension.
Here’s what to look for when choosing an accountant:
Member of ICPAS
Your accountant should be a member of the Institute of Certified Public Accountants in Israel (ICPAS), known in Hebrew as the Lishkat Roei HaCheshbon B’Yisrael. This organization sets standards and norms in the industry and keeps members abreast of the newest innovations and updates to standards.
Offices nearby
You will occasionally have to visit your accountant’s offices, so it’s a good idea to choose one whose offices are not too far from where you live or run your business. However, most of your interactions will take place virtually, so as long as your accountant has software which is compatible with yours, you can transfer data efficiently.
Languages
If you’re not well-versed in Israeli accounting (and who is, really?), you need to understand your accountant’s explanations. Unless you are fluent in Hebrew, it’s best to work with someone who speaks your native language, so you understand emails and phone conversations and don’t run into trouble because of faulty communication.
Responsiveness
There’s nothing more annoying than reaching out to your accountant, not getting a prompt answer and then finding out you have incurred late fees (or worse) due to not filing something on time or not filing properly. Avoid this by asking friends and family for referrals to accountants who are both responsive and proactive. Once you get a recommendation, ask around some more – social media makes this easy to do – to see if the general consensus is positive.
Size of firm
There’s no one answer for how big your accountant’s firm should be. A large business is likely to want to work with a large and well-known accounting firm, while a small business may prefer a smaller firm. Big firms have lots of experience and satisfied customers, but smaller, or even one-person firms, can provide individualized attention you might not get from a bigger firm. A meeting or phone conversation with the accountant can give you an initial feel for how much time and energy he/she will devote to your success.
Relationships with employees of government offices
An accountant who has cultivated relationships with employees of the various government offices, such as Mas Hachnasa (income tax), Bituach Leumi (national insurance) and VAT (Value Added Tax) can help you when a problem arises and a personal touch is required. Many accountants will claim to have connections in government offices, but you will want to ask questions that reveal whether these are really good relationships that can be called on when there’s an issue.
Collaborative
If you’re a US citizen, it’s important that your Israeli accountant collaborates smoothly with your American CPA, since your US tax filing is based on your Israeli tax report. Some American citizens choose to work with a firm which takes care of taxes in both countries, while others choose an Israeli accountant who speaks English and understands issues pertaining to US citizen filing.
Price
The prices for accounting services vary greatly. While you won’t want to choose an accountant based solely on his low prices, you do want to pick one who provides ROI for his services. Go with an accountant whose price is fair for what he is offering. Ask people in businesses of similar size or in similar industries what they are paying for accounting services and what that price includes. Some accountants will charge a smaller monthly fee but will charge extra for one-time projects, like filing your yearly report or Hatzharot Hon (declaration of assets). Others will charge a higher monthly fee that includes all those reports. Also check whether the price includes proactive outreach with reminders to take care of paperwork and updates on new laws.
Good vibes
As with any service-based business, it’s important that you feel comfortable with the accountant who is managing your financial obligations to the Israeli government. Choose someone with a vibe that you connect with, who you can ask questions to without feeling like you are a bother and who explains things clearly and patiently. Ideally, you will have a long-term relationship with your accountant, so choose someone who is pleasant to deal with and will contribute to the success of your business.