Yes, Quickbooks is deceptively easy. But, as easy as it is to figure out how to write a check, or create an invoice, it’s equally easy to mess up weeks, or even months, of hard work with just one click. Unless you have a good handle on basic accounting principles, you will likely make mistakes without even knowing it. When you realize it, you will spend hours fixing it. A professional can help you lay the foundation to ensure the accuracy of your entries.
A good professional accountant, like a doctor, can diagnose any issues and anticipate potential issues. This will save you tons of aggravation.
If you have the tools you’re more likely to use them. Having a professional on call to answer any questions that pop up, will also make it easier for you to get quick answers, and avoid errors down the road.
Having a professional review your work regularly, and answer questions on as as-needed basis, will save you time, money, and frustration down the road. A professional also knows the best path to take in order to ensure your company is playing by Uncle Sam’s rules as well. There are many things people say to their accountant that they believe are harmless to say or ask, but a good accountant will tell you these things should not be done!
So here are some things not to ask your accountant, and a few things that will save you from driving them a little bonkers!
1. Can’t you just use the numbers from last year? I know it was close!
Sure, we could do that. It will be just fine. Until you get audited that is. (Nobody wants a messy audit, let’s just crunch the numbers. I promise it will be less painful down the road)
2. I didn’t keep a mileage log. I’ll just make one up.
Sort of along the same lines here. You could totally make up a log with dates, and the whole nine yards. It’s better to be honest so it doesn’t come back to bite you (you know where).
3. I know I made charitable donations, but they didn’t send me anything.
This does happen, however, it is extremely important for keeping your books legitimate to have these on file. Uncle Sam kind of demands it actually. So how about we make a few phone calls to said charities? They will send you a receipt.
4. So, I can take a trip to see my family, make a stop along the way to look at some equipment and write off the whole trip as a business expense, right?
Umm, no. You cannot do that. You could expense mileage to go see the equipment, and perhaps the fee for parking, but not your family vacation.
5. Why can’t I claim all these meals and entertainment expenses?
You can’t write off ALL meals and entertainment. It is only acceptable to do if you are meeting with a current customer, potential client, or employee. If you are alone you can’t write it off. If you are travelling for business you can write off 50% of your meals, but not the entire bill.
6. All that 35k in cash was business expenses. No, I don’t have receipts.
Yeah, so that isn’t going to fly. You might as well just wave a red flag at the IRS! Let’s strategize how we can backtrack those expenses, and come up with a process for receipt management.
7. My husband/friend/mother found this article online that says I can deduct XYZ: [link to misunderstood article].
Listen, there is a lot of information out there on the web. It can absolutely be a tremendous resource. However, your accountant isn’t your enemy. The IRS doesn’t pay us to find ways to keep money from you. While I am sure your husband/friend/mother had good intentions trying to help you save money, if your accountant tells you you can’t deduct it, there is a legit reason why. Trust me, we would much rather save you the money, too!
8. I am paying Aunt Alice in cash, or “under the table,” because [insert reason here; ie: she’s on disability, doesn’t want to mess with taxes, it’s such a small amount, etc].
Oh boy. There are so many ways this can go wrong. You MUST account for every payment to every employee and independent contractor! The repercussions for not doing so, and getting caught, aren’t worth the measly amount you will save by paying someone “under the table.”
9. We did NOT lose money last year. Your numbers are wrong. Fix them.
You do what you do for a living because you are good at it. You deal with the details of your industry everyday, and know it better than your customers for that very reason. Well, the same holds true for your accountant. Again, we are on your team. We want to give you good news, and truly wish you success! If your accountant tells you that your company lost money, it did; and your accountant verified that at least three times because they didn’t want to be the bearer of bad news!
10. What do you mean my fee went up? How hard is it to put numbers in the right place?
This is just not nice. Seriously. Like any other business or industry, there are reasons we have to raise our fees. One being our continuing education. The industry is in a constant state of change, and it is important that we continue to update our knowledge base to give you the best and most current advice. We have to adjust our fees accordingly. We will recommend you do the same with your fees when the same situation occurs. Another reason could be, you have been a client for 4 years, and it is simply just inflation at this point. Most accountants are not trying to gouge you or be billionaires, we’re trying to take care of our families.
Hopefully this article cleared up any misconceptions you may have had about taxes, expenses, and the notion that your accountant is out to get you. We really are on your team! That being said, all of us accountants appreciate your business! We want to help businesses make smart decisions financially. That includes making sure you aren’t audited by the IRS; and if you are, that you are fully prepared, and that it is as painless as possible. Well, as painless as anything that has to do with the IRS is anyway!