Let’s say your bookkeeper, whether they are hourly or at a monthly rate costs $500/month. That is $6,000/year. Your business only profits $30,000 a year. Is it worth it?
Without giving away any personal details, here are some real ways I personally have seen clients pay far more by not getting an accountant than they would have paid for one.
Example 1: Client was double reporting income by recording customer payments in Quickbooks and leaving them in undeposited funds and then reporting deposits as income. This resulted in DOUBLE income reporting and a tax return where they owed over $65,000 in taxes. Within five minutes of reviewing their books, I knew what was going on. The problem was corrected and an amended return was filed for about $30,000 less.
Example 2: Client’s vendor often double-charged them for jobs and marked up prices on their accounts. An audit of all the vendor accounts resulted in more than $15,000 in savings when the vendors were forced to issue credits and reduce amounts owed due to billing errors on the vendor’s side. Consistent and ongoing vendor audits resulted in more savings and correction of errors.
Example 3: Client had many bank/loan/credit card accounts and was not expensing the interest on the business-related financing to the business. This client normally paid between $5,000 and $10,000 in taxes each year. Once all these business expenses began to be used, the client started to pay a much smaller amount or receive a refund each year. Also, being aware of the amount of credit cards and the effect of the combined interest helped them understand the importance of closing more of them down.
