What we will cover is how important a skilled, expert accountant needs to be a key member of your team. Frankly, if you have to select very few people to be on your team, an accountant must be on the “short list.”
The first reason is that you need accurate financial information.
It makes absolutely no sense to be guessing or estimating where you are with your finances. You should have all of the information you need at your fingertips. All of it should be accurate and up-to-date, whether you use a program like QuickBooks or Excel, or you are doing it by hand. It is always good to have someone else to verify and evaluate what you have posted. You want to know that it is in order.
The second reason is that you should only pay the correct amount in taxes that you legally owe.
Notice how that last sentence was stated. You don’t want to pay more than you should because you didn’t categorize revenues and expenses correctly. You also don’t want to pay less than you should. No one wants to get in trouble with the IRS. Lastly, and most importantly, you want to have peace of mind with your reporting in your tax returns.
The third reason is that you want an advocate and an advisor for the current situation and also for making decisions.
You want someone to tell you if you’re doing well or if you’re in potential trouble. Furthermore, if you’re looking to expand your business, your accountant can help you develop a proforma statement to determine what you will need in financial resources. If you’re planning to apply for a loan, your accountant can assist you with the reporting you need, plus your accountant can help you with the questions you can expect.
The last reason is to maintain checks and balances.
If you happen to have someone managing your books, you want for someone outside the normal business processes to evaluate what is happening. Every year there are an alarmingly high number of cases of fraud within organizations. Most of them are where one person is left with all of the responsibilities, with no accountability. And if that person happens to be you, it just makes sense to have someone verify that you’re doing a great job.
We’ve presented some great fundamental reasons.
Now we want to share some additional, practical points that should leave you with no doubt about the importance of having a skilled accountant.
First, why waste your time trying to figure everything out?
Give this work to the experts. I know one top-notch international tax advisor who flatly refuses to do her own personal tax returns, even though she is qualified to do them. Why? Because she figures that she needs someone who is skilled in personal tax returns. Accountants spend a considerable amount of time in continuing education, staying up with the current regulations and policies. Let someone who knows how to do the work and let them do it.
Secondly, why would you totally depend on software programs without an accountant looking at your books?
Whatever you put into those programs will determine the quality of results that come out of them. Even though we’ve worked with some excellent accountants and tax advisors, and we think we know more than the average entrepreneur, we realize that we aren’t at the level of our accountants. They see things that save us a lot of money and a lot of hassles. Get someone who knows what needs to be prepared in the first place.
Lastly, stay away from the expense argument.
It is too easy to argue that you don’t want to pay for the work you can do yourself. Your time working on your business is way more important and valuable. To be working on your accounting and tax returns isn't a good use of your time. (That's why we suggest you need a bookkeeper, both for your business or your personal finances.) Unless you are an expert accountant, your time doing something that you don't do regularly is a time-waster.