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Eve Tahmincioglu

Primary author Eve Tahmincioglu has been covering small business and entrepreneurship for more than a decade. She regularly writes about small business issues for the New York Times and BusinessWeek's SmallBiz magazine. She also writes the Your Career column for MSNBC.com. She is the author of "From the Sandbox to the Corner Office."



Accolades for accountants

Posted: Tuesday, April 08, 2008 3:31 AM by Eve Tahmincioglu
Filed Under: , ,

I’m in love with my accountant.

Actually, it’s not a "Pride & Prejudice" kind of love. I really don’t know the guy that well, but he does my taxes. Something I would never want to go solo on.

But I applaud small business owners who are able to go it alone. That’s great. You save lots of money and control your own tax destiny.

I don’t want that kind of responsibility, honestly.

Turns out most business owners are as chicken as I am.

Image: Tax Preparation Gets Underway Ahead Of April Deadline
Tim Boyle / Getty Images file
About 78 percent of you will be hiring a professional tax preparer or outside consultant to help you file your taxes due next week, according to the 2008 OPEN from American Express Small Business Monitor that surveyed 627 small business owners and managers of firms with up to 100 employees.

There are only 17 percent of you brave souls out there that do it yourselves, and of those 6 percent use pen and paper to figure out what you owe Uncle Sam.

Wow, how old school.

Most of you go-it-aloners have left the dark ages and use tax software, the survey found.

So are we all just wimps if we hand off the tax-filing responsibilities to someone else?

“I think small business owners must take responsibility for their financial statements.  They should use accountants to prepare their taxes but do the monthly statements themselves,” says CEO of ProfitabilityChannel.com and author of "The Ugly Truth about Small Business".  “Tax law changes so quickly that business owners should not take the time to learn all about them.  That's the job of their accountant.”

She actually thinks entrepreneurs should educate themselves in bookkeeping. Yikes.

“If a business owner doesn't know enough to question his financial statements when he receives them from their internal bookkeeper, he has to invest the time to talk a bookkeeping class at adult education," she dares to suggest. "It will be the three most miserable months he can spend.  However, when he's done, he will know enough to question his financial statements each month.”

Are any of you up to that misery?

Mike McDonnell, who runs a public relations firm and also has a rodeo and bull-riding promotions business, has the solution. He has a bookkeeper and an accountant.

His one-man operation, called Donnell Public Relations and based in Pueblo, Colorado, is enough for him to handle without taking on the tax system.

He pays his accountant, that he’s had for 12 years, upwards of $1000 and doesn’t ever question the expense.

“I do not have the time or knowledge of tax law,” he says. “And those of us who run our own businesses want to get every dollar coming to us.”

Amen brother!

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Comments

I can't express my concern about business, especially small business, to use CPA's ir accountants. My brother-in-law is a CPA and my husband is an Enrolled Agent. I help out at the office during tax season and I have seen more than I can count come to us after the IRS has Questioned their returns. Sometimes is't to late to do anything other than to set up a payment plan. But there are many times when they can keep the tax burden to near nothing. I urge anyone who does not understand tge tax laws to seek help. It will cost you some money upfront, but may save you thousands in the end.

WSS (Sent Tuesday, April 08, 2008 9:53 AM)

Thanks for the good words.  My passion is helping business owners become more successful by serving small and emerging businesses with tax strategy, recordkeeping, cash flow, overhead control, even branding/marketing.  Any good firm should be able to work with the client to serve their needs with reasonable fees.  We preach keeping control of overhead so obviously it is a big deal for us here at TaxxDog, which in turn keeps us affordable for small, and especially new, businesses.

JeanMarie Hinds, Appleton, WI (Sent Tuesday, April 08, 2008 10:07 AM)

Maybe we're living in two different worlds because I think the feeling you have is a false security. I think it’s a question of how American laziness has opened doors for jobs because individuals do not want to take responsibility for anything. Maybe you shouldn't have a business if you're not willing to educate yourself on how to run or manage it, how do you know you make profits? I enjoy learning about keeping my business running and I look at the books constantly to figure out ways to improve or see future problems.  How do you know that your accountant isn't even busier then you and has been keeping up with tax laws to the letter?  I’m sure they have other clients to service as well and want to get them all in within the tax deadline are they taking $1000 worth of time on your taxes or just getting them out in a rush.  Even a CPA could pass their tests and be too lazy to apply the concepts correctly.... think about it, Enron didn't happen by accident.  The country has falling into such disarray because we just keep passing off on responsibility and try to make a buck as easy as possible. The housing problem was irresponsible marketing from mortgage brokers and real estate agents that really don't lose sleep if you lost your home and ruined your life as long as they can still drive their BMW convertibles.  The only way to know for sure something is done right is to do it yourself.  Maybe you want to praise yourself for having the ability to trust other people with your money, to make your decisions for you, in order to maximize your benefits for your interests (really doesn't sound all that comforting does it) but that seems like a communistic ideal if you ask me.  Do you go to a used car lot hand a salesman $20,000 but tell him you could afford $30k ask him what he thinks you should drive and wait by the front door for him to drive up with a car specially picked for you?  If it’s not over $20k he’s not doing his job.  Don’t get me wrong there are good trustworthy accountants out there but I agree that everyone needs to keep their knowledge as current as possible and question things constantly to keep their people in check before you throw this kind of blind trust into them. Trust always must be earned.

Tony, prospect park, Pennsylvania (Sent Tuesday, April 08, 2008 10:21 AM)

Actually, I AM in love with my account; she's my wife. With that said ... as a marketing coach, I know marketing. I have also been self-employed for 18 years, so I know the basics (and then some) about my company's figures. However, I wouldn't take on my taxes -- personal or business -- any more than I would suggest to an entrepreneur that he/she takes on marketing without professional guidance.

Besides, it's well worth the money (yes, I do pay her for her time) to have an expert handle it than it would be for me complete the task. And I certainly do not want to wonder whether I filled out all the necessary forms and had done so correctly.

Peter George, Warwick, RI (Sent Thursday, April 10, 2008 3:09 PM)



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