Four Ways to Annoy Your Bookkeeper or Accountant
The mere thought of basic bookkeeping or accounting tasks can leave some home-based business owners feeling a bit woozy. The terminology, the seemingly endless mountain of reports, and the daily influx of payments, invoices, and orders can leave you feeling stressed or helpless. At some point, you will need to hire professional assistance to manage your finances. When that time comes, there are certain things that you want to avoid saying to anyone you are considering hiring. Here are four things that are virtually guaranteed to make any accounting professional sigh.
1. I Don’t Even Know What You Do.
This can annoy your accountant for two reasons. First of all, if you truly have no idea what you can gain by hiring an accountant, you are probably going to be a difficult client who will need a great deal of extra attention. However, the second reason that accountants may be annoyed by this statement is that their experience has taught them that most clients uttering those words know more than they are admitting — because they have tried to handle their own finances without any understanding of basic accounting and the results have been disastrous. They chose the wrong accounting method, neglected to file mandatory payroll reports, borrowed so much that they cannot make even minimum payments, or have not taken a physical inventory since they opened their home-based business. Having realized that they are now in hot water with the IRS, the state, and their creditors, they want to hire an accountant to straighten out the mess that they created.
2. Why Should I Hire a CPA When a Bookkeeping Service Is Less Expensive?
Bookkeeping services can be a great way to delegate many transactional tasks so that you have more time to devote to running your business. However, a bookkeeper’s job is to organize and record the money moving through your business to generate financial reports. A CPA analyzes those financial reports to provide clients with guidance. In addition to providing you with financial guidance to help you maximize your profitability, a CPA can represent you in legal matters with the IRS, prepare and file your state and federal tax returns, help you create policies and procedures, and handle many other tasks that are beyond the scope of a bookkeeper’s duties or abilities.
3. I Want You to Serve as My Registered Agent.
No, you probably don’t, and there is a good chance that your accountant or bookkeeper does not want to be your registered agent. From their point of view, you are committing them to being in the office every day during normal business hours, so they cannot close their doors for vacations, visits to other clients, or family emergencies. From your point of view, you will only have a registered agent in the state in which your accountant is based, so you will likely need to hire multiple registered agents if you have a presence in several states. Accounting professionals frequently charge several hundred dollars a year for registered agent services. It makes more financial sense to choose PhysicalAddress.com to provide you with an economical virtual address for your home-based business. Every plan allows you to appoint us as your registered agent at no additional cost, and we can serve as your registered agent in any state in which we have a location.
4. I Use the Same Credit Card and Bank Account for My Personal and Business Expenses.
It is difficult to overstate the importance of separating your business and personal expenses. Too often, the owners of newly launched home-based businesses expect their bookkeeper or accountant to be mind readers. They think that financial professionals can simply look at a statement to determine whether a charge or check represents a deductible business expense. What makes it even more interesting is when a single transaction includes both personal and business purchases. The chances are excellent that not even you can remember exactly what you bought every time that you swiped your debit or credit card. Unless you separate your expenses, you could think that your business is more profitable than it is, or you could be missing legitimate ways to reduce your income taxes.
Whether you hire a bookkeeping service, a CPA, or both, you are establishing a professional relationship that can help your home-based business succeed. As in all relationships, effective two-way communications are critical. You and your accounting professional should each establish proper boundaries and clarify expectations.