Accounting = Hell, Does It Have To Be So?

Bluepenguin

Do any other of you feel like the subject of accounting is pure hell? Am I the only one???

I feel like my accountant exists only to send me a bill at the end of the month, doesn't bother to ask questions, just makes assumptions. We've gotten billed $10,000 in accounting and bookeeping fees in the past 6 months (yes) only to find out that he's completely misrepresented all of the credit card transactions, and transactions to pay the owner (my husband). For some reason, he's gottent the idea that the business Mastercard is a personal card, therefore all transactions in it it are "Loans to Shareholders" ... I could go on.. I won't .. it's very upsetting. He keeps making other mistakes... There were some heated emails exchanged between us today, and I'm meeting him tonight.

He's received the correct information to compile the work, and clarification on what each account is designated for. I've done my job. Sorry if this is a rambling message, I just needed to vent...

Warren

Not sure how big your business is but you could consider doing your own bookkeeping/accounting. I have 7 employees and use quickbooks, have my payroll outsourced through Paychex, do my own WC and taxes. Of course it helps that I actually like to work with numbers but I think in your case the $$$$ could make doing it yourself really appealing.

Bluepenguin

I am doing all of our 2009 in Quickbooks In fact I reduced my hours at my job just to be able to do this! (to give you an idea of the desperation here)

Warren

So what is the accountant for??

Thundercow

Oh yeah, ditch the accountant--you spend just as much time communicating with them as you would doing your books yourself. And, with electronic banking, most transactions are automatically downloaded and automatically categorized (after the first time you input it). I do my own books, in quickbooks, and I spend maybe 20 minutes a week...

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Bluepenguin

he did our 2007 and 2008

Warren

I have heard similar stories from some friends who are also contractors/subcontractors. Generally the only way they know if they are making or losing money is when the accountant gives them a quarterly report. I couldn't live like that. If your intelligent enough to run a small business then you have to have some concept of dollars and cents. Even before I got a computer (like 12 years ago) I was doing my bookkeeping using a paper ledger. I'm sure somebody will tell us that they can concentrate more on their work if they don't have to worry about the numbers. I guess if your business gets larger you may have to delegate some of those responsibilities to an accountant but if not I say do it yourself, keep the money in your pocket, and know where your business stands at all times.

BusyOne

If you do not like bookkeeping, hire a part-timer as needed to keep track of everything. Use an accountant only for the most complicated of tasks to save money. From the sound of your post, the accountant you described does not seem like a good fit. Find an accountant you like and trust.

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maverick17

A good accountant is worth his weight in gold, more if the guy is thin.

If you do the accounting and taxes yourself, I would say you would forever be disqualified at laughing at a DIY homeowners painting, tile work, etc.

And if you say you use turbo tax so it must be right, if you have any sizeable business, you need such a grasp on tax law to maximize your business and minimize your taxes, I would almost guarantee you are missing something.

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BusyOne

I agree with you. Great advice - you cannot do better than someone who does it for a living. The tax law is complicated, so I will stick to bookkeeping and let the accountant advise on the rest.

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gallerytungsten

hi Penguin,

I can sympathize, as it seems accountants often make these kinds of boneheaded mistakes. Even when you explicitly inform them of something, they still will get something wrong.

As others have suggested, you need to take more control of the accounting. If you aren't doing it already, you can set up some Excel spreadsheets to track larger jobs; or take some other measures to gain control and/or insight.

Also, it seems likely you need a new accountant. One that is a CPA and can prove that they understand your kind of business. (That's often the problem; accountants often have no clue about how a business operates.)

Remember: an accountant doesn't make you money. They only tell you, historically, where the money went and how much you made or lost. The more you can do to find these things out for yourself, the less you will need the accountant for hands-on work. Ideally, you'll get to the point where you'll only consult a few times a year with the accountant, them have them prepare your taxes.

AtlRemodeling

Penguin,

We also use Quickbooks for all off our bookkeeping. We make sure that job related items are charged to each job and I usually try to overkill with information in the memo fields of each transaction that may be questionable to our accountant. Especially, with credit card charges.

When needed, we email the file to her, she reviews and prepares necessary tax filings, etc. Works great for us but in your situation I think you are being overcharged.

Some accountants love to create questions so they can bill additional time; no different than a bs car-repair or the like. Unfortunately, there are scam artists in every profession. If you know other contractors in your area, ask who they are using and how the like him/her.

Warren

Nonsense!

While it is true that tax law is complicated, it is ridiculous to assume that I cannot figure out which tax laws apply to my business. Any supposed "loopholes" that I miss are not truly loopholes but fraud. I have had some basic tax courses and I keep up with the tax laws that apply to me personally and my business. Accountants are truly good salesman if they can convince you that basic math is beyond your reach. I'm sure you guys all do research to keep up with the latest products and techniques for your business and accounting is no differant. To each his own I guess. I prefer to do the math, keep control,stay informed and save a few bucks in the process.

As far as using turbotax,I used to use it for my personal taxes but it is not the best solution for my business taxes. You can go to the irs website and download the proper forms and just fill in the lines. If you do the proper bookkeeping throughout the year the taxes are not that hard to do. Generally,unless you have undergone a major business change, check to see which forms were filed last year, check for the new tax law updates, and start there.

Bluepenguin

thanks for all the responses guys... the expense of the bookeeping is exactly why I decided to just do it myself... we had a friend recommend another accountant that he's dealt with for years - and we will be switching to year for 2009. I absolutely still need an accountant, I don't want to find a way around it, there's just too much tax law to grasp. But as far as the bookeeping goes, we need to do it ourselves, or have it done half-a$$ed and late, as was the case up to now. Looking at books twice a year and having no idea of what's in them just doesn't cut it anymore.. not with the business growing and having 6 guys work for us...

SeamlessGutters

Wow I would be very upset! Well, I went to business school and realized that I needed some help with the accounting. I got quickbooks 2008, but I still have too many questions. A good friend of my is a corporate accountant and is helping me out for free, (right now) he says he wants to go on a fishing trip if I have a good year...) Anyways, it sounds like this is taking up to much of your time, I would reccomeend researching a local guy in your area, that specilizes or deals alot with other businesses very similar to you. He/She will already know exactly how to get you out of whatever situation and maximize your profits, because chances are they have a client very similar to you. A smaller operatrion, that can give you good service is what you need.

SeamlessGutters

Oh, also this person should have references...And check them! Ask them if he/she is creative, smart and good at what they do? A really good accountant is hard to find, because the super good ones are very expensive or work in corporate. Thats why when my friend helps me out I try to something to show him I appreciate it, example, go out for some drinks/dinner, something.

ForumNomad

Quickbooks and Paychex are the way to go. You can hire an accountant for a quarterly assessment of your books, or simply to file your taxes on an annual basis. Take an online class about basic accounting principles or just spend some time messing around with it. There is no need to pay an accountant that much money, unless you are a Fortune 500 company (in my opinion).

maverick17

I take it you have never sold (or maybe the better word is *claimed* you sold) depreciated property before?

Or you are in the practice of stepping over $$$$ to save .01's.

Like I said before, if your business is as simple as I brought in $75k and had $4k of supplies, my profit is $71k, then maybe you can get away using the IRS forms, but even then, why? I would imagine for a return as basic as that, a qualified accountant would charge less than $300, and maybe be able to offer you some advice on how to get more back, or pay less, all within the confines of the law. Not loophole fraud.

I am not advocating ignorance of tax law, in fact I try to keep up with it somewhat myself, but more so to be aggressive and to maybe know some questions to ask, rather than need them asked to me.

If you live in Ohio, you have a couple other "loopholes" depending on how you earn your income, and if you are married and your spouse works. All completely legit.

StairJunkie

I started out majoring in accounting in college, finally settling on finance, but I've learned to appreciate good accounting and the important information it can give you. Once you have the correct numbers, you can make better business decisions. Finding the right person to do the job however... that's a skill in and of itself, especially if you become that person!

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rwa

Bluepenguin, I wish I had seen this topic when it was new. Hopefully, it is not too late to give you some insight. Prior to becoming a contractor I was an accountant. That was many years ago. The entry to the Shareholder Loans account is more than likeky a corrrect entry. It is a balance sheet account. I would suspect the entries go to that account because the credit card in question is personally guaranteed by you or your husband. Therefore, in effect you have loaned the business money.