Are you on the fence about hiring an accountant? Do you think accountants are only necessary during tax season? Well I’m writing this week to let you know that accountants can do more than you think. Below are seven myths that I’m debunking regarding accounting and accountants to help you make the best decision for your business and personal need.
#1 My accountant needs to be in the same state as me
Although some people may prefer face to face interaction, your accountant does not need to be located in the same state as you! With the increased use of secure technology to get work done, there are now endless ways for accountants to collaborate with their clients regardless of geography. Documents and information can easily be shared using cloud computing and financial accounting standards follow a uniform code recognized all over the US making the perfect storm for clients and accountants to work together all over the country. Even tax preparation and strategy has relatively few barriers since federal tax forms are the same for all US taxpayers and a strong accountant will be able to learn and help you navigate state specific tax rules to reap the best benefit. Your goal when searching for an accountant is to find someone who you are comfortable with and who you can trust with your financial information. Perform due diligence checks on professionals by ensuring the business is appropriately registered and licensed in the state they hail from. Licensed CPAs should be able to provide their license # upon request.
#2 Accountants only prepare taxes
Do you really think we only work one season per year? I wish! Outside of tax season accountants are heavily involved with their clients’ individual and business needs. This can include routine operational accounting functions such as bookkeeping and payroll services to higher caliber services like CFO or advisory services. Outside of routine accounting, financial auditors make up the vast majority of those employed in the public accounting field. Retaining an accountant year-round can help you save money by making recommendations on ways to decrease costs and increase income. Financial management and advice to individuals and corporations is a huge part of an accountant's job and is most effective when performed throughout the year.
#3 Accounting isn't important or necessary
Hiring an accountant can save you stress and money over time. Many people view accountants as a cost, but really, we’re an investment. An accountant will help you organize your finances and with the right fine tuning will be empowered to help you thrive financially. That means you will have more time to spend doing what you want to do. The best trained accountants will bring signs of trouble to your attention far before things go downhill. We also follow your finances over the course of the year and come tax time assembling your return(s) is much less painful.
In addition to tax preparation, your accountant can also give your business monthly financial reports to help you stay on track or improve in various areas. They can tell you if your prices are where they need to be in comparison to the market and your expenses. Just because your business is busy doesn't mean that you're doing well. Hiring a trained professional to analyze the numbers can have a significant pay-off down the road.
#4 All accountants are boring
Remember Milton from Office Space? Wait, you’ve never seen Office Space?!?!?! Okay, finish reading this blog and then seriously go watch that movie. For those of you that have, all accountants don’t present like Milton. Many people view the job of an accountant as boring. Why? Because there may be boring aspects to our work? Name one job that doesn't include some less than exciting parts of doing it. You can't, can you? The fact that a job has some boring parts to it isn’t a strong argument to say that a group of people is boring.
Here are some examples of a few famous, not-so-boring, individuals. Mixed martial artist Chuck Liddell received a BA in Business and Accounting during his college years and a few other notable celebrities who studied accounting or were accountants include musicians Kenny G and Mick Jagger. I won’t even delve into the shenanigans that go on at the annual conferences of the globally recognized public accounting firms. Me personally, I enjoy competing in triathlons and am an avid homebrewer. I have more fun than that but those are a couple of my stress relievers that help me refresh. Yes, accountants of the past may have been boring but the rising talent of the field is much more than just a number cruncher.
#5 I can't afford an accountant
Yes, there are accountants that will cost you an arm and a leg, but that is true for any professional service. Have you had your hair done by a decent stylist lately? Last I checked they weren’t cheap. But you like to look good and you find value in the service so you’re willing to pay top dollar for the best pro in town. The key is to find the right firm or individual for you, who will provide the services you need within the budget that you can afford. We’re not magicians but any good accountant will work hard to at least find cost-savings equal to (more often greater than) their professional fee. It might not happen on day one but it usually happens in time. Working with a diligent accountant that will help you avoid making just one mistake can be worth thousands of dollars.
#6 Accounting is easy, I can do this myself, I have QuickBooks
So many people think that QuickBooks is a replacement for hiring an accountant. Although some people have the knowledge and expertise to use and understand the program, it doesn’t replace the fact that you need to understand accounting. You can’t expect a software package to condense four/five years of study into a tight little package. Sorry folks but we just we aren’t there yet. More often than not, individuals open it up and become overwhelmed and confused fast. Hiring an accountant can be beneficial in that they can help you setup the software and educate you on how you can and should use it. They can check-in and make sure that everything is in order and fix problem areas that arise. QuickBooks may be able to help you keep information organized and make business decisions, but if the information is wrong what good is it? Familiar with the term “garbage-in, garbage, out”? Respect your own limitations and avoid doing it yourself when you know you should hire a professional. The benefits of having it done right the first time (even it does cost you) will far outweigh the cost of having someone fix mistakes down the road.
#7 All accountants work for the IRS
You’d be surprised how many people think that all accountants work for the IRS. While this isn’t exactly a myth, because there are accountants employed by the IRS, your tax preparer is not one of them. Accountants that are hired to prepare tax returns are usually well-versed in the tax code and can act as a liaison between a taxpayer and the IRS, but in no way, shape, or form do they work for the IRS. The accountants that work for the IRS are completely separate from the equation. So when I have to deliver the unfortunate news that a client owes on their taxes, that client is not paying me the tax due. We are simply the messengers. The best accountants deliver news and offer recommendations on how handle the situation rather than turn the client loose to pick up the pieces on their own. Even better, if you have someone working with you all along you can avoid getting into most messes with a simple conversation from time-to-time.
I hope that you learned something reading about these common myths. The accounting profession receives a lot of heat and criticism but at the end of the day our services are valuable and necessary. There is so much more bad press out there that I could have covered but I wanted to stick with the most common myths that I come across. Think you know of a myth related to accounting? Feel free to comment below.
Thanks for reading!