FIND THE RIGHT PERSON TO DO YOUR ACCOUNTING AND BOOKKEEPING
Many small business owners concentrate on the operations of their business yet spend little time and attention to the financial and other business records, because these activities are oversimplified and only seen as a necessary overhead item that detracts from profits. Untold amounts of money, time, energy and effort are lost each year because small business owners hire inexperienced or inadequate persons to do their bookkeeping. Usually, by the time the issues, errors and deficiencies are recognized, the damage has been done and tremendous amounts of cash and time have been wasted, not to mention the cost and time to fix the problems.
Many people buy a computer program such as QuickBooks to record the financial transactions of their organization with the misunderstanding that the program somehow guides the users through the process. In fact, the reality is quite the opposite. Any accounting program, such as QuickBooks, must be setup, established and maintained properly. All transactions must be entered correctly. There is no guidance from the accounting program on how to correctly enter the data. You wouldn’t want to fly on an airplane where the person had little training, experience and understanding of how to fly, and conceivably more important, the concepts underlying the activity. In the same way, the person doing the bookkeeping and accounting should be well versed and trained in the activity, with a solid understanding of the accounting principles and concepts underlying the transactions.
BE PREPARED, if you are called for an audit and the IRS determines or discovers that the business or organization’s bookkeeping or accounting records are improper, inadequate or incorrect, they can estimate the income themselves and then the burden will then be on the owners, directors and taxpayers to prove that the IRS is incorrect. Tax courts have held that the IRS may use any reasonable method to reconstruct income.
In conclusion, be smart, hire the right person for the job. Don’t be penny wise and pound foolish. Be prepared to pay a sufficient amount to hire a qualified person. Cheaper candidates are charging less because they realize that they don’t have the skills and experience to charge more. There is no set fee for bookkeepers and accountants. Costs run the scale between limited skills and experience to licensed CPA with advanced degrees. Most bookkeepers and many accountants are unlicensed so determining their value can be very challenging. Investigate all candidates’ credentials and employment history before you hire them. Candidates are going to tell you that they can do the job, otherwise they know they won’t be hired. Don’t simply trust the candidates’ representation when hiring. Consult with someone who understands the accounting and bookkeeping processes to help you evaluate the candidates’ skills and weaknesses.
Wishing you the best of success!
Larry Carlson Jr
Serving Hartford, Windham, Tolland, Middlesex, New Haven, New London, Fairfield, and Litchfield counties in Connecticut as well as greater Springfield, Massachusetts.