Why It Makes (Dollars and) Sense to Hire an Accountant to Do More Than Just Prepare Your Tax Return (continued from yesterday)

By Gary Krupa, CPA

Here's a video showing what it can be like when you don't plan ahead, or when you make unsound business decisions. Or you can watch it when you want to have an idea of what it feels like to be on a classic roller-coaster ride:

(See first paragraph above re: the definition of a sherpa.)

Here's what the experience of having peace of mind can be like:


Gary Krupa is a CPA in New York and Arizona, with more than twenty-five years experience providing accounting, tax, audit and computer services to small and medium-size organizations. He’s especially attentive to the needs of his clients. He moved to Rimrock, Arizona in late May 2008. He has offices in Rimrock and Peoria, AZ. His e-mail address is gkcpa@q.com.
Read more about Gary Krupa's accounting service by following this link:

The Right CPA, to Help You Win at Monopoly and Business

Why It Makes (Dollars and) Sense to Hire an Accountant to Do More Than Just Prepare Your Tax Return (continued from Friday)

By Gary Krupa, CPA





Here are some examples of how I've helped my clients and employers:

As the controller of a real estate company, I discovered, by reference to its amortization schedule, that it had been overpaying interest on its mortgage loan for several periods. I then contacted the lender and arranged to have the overcharge credited to the company and to correct the amount of each loan payment.

I prepared and submitted an offer in compromise for a disabled individual to the IRS. The client owed many thousands of dollars in income tax, and was having much difficulty paying what he owed. I represented the client before the IRS in the matter. This action resulted in the client's offer being accepted by the IRS and all but a small percentage of the tax liability was eliminated.

I helped a start-up leasing company obtain about $0.5 million in loan financing by presenting their financial data in a manner that was more appealing to the lender.

I helped a spa company client avoid having to pay approximately $58,000 in sales tax deposits, due to my timely and accurate filing of its sales tax returns.

For a non-profit organization client, I helped it apply for and obtain tax exemption status with federal, state and county governments.

Tomorrow's entry: a video showing what it can be like when you don't plan ahead, or when you make unsound business decisions.


Gary Krupa is a CPA in New York and Arizona, with more than twenty-five years experience providing accounting, tax, audit and computer services to small and medium-size organizations. He’s especially attentive to the needs of his clients. He moved to Rimrock, Arizona in late May 2008. He has offices in Rimrock and Peoria, AZ. His e-mail address is gkcpa@q.com.
Read more about Gary Krupa's accounting service by following this link:

The Right CPA, to Help You Win at Monopoly and Business

Why It Makes (Dollars and) Sense to Hire an Accountant to Do More Than Just Prepare Your Tax Return (continued from yesterday)

By Gary Krupa, CPA



What other qualities does one find in a good accountant? A good accountant listens to his or her client, and thereby understands what their needs are and how best to serve them. A good accountant remains aware of new developments or methods that may benefit the client. Such a person is both perceptive and analytical. And a good accountant remains dedicated to helping his or her client succeed. One doesn’t need to be gifted to be a good accountant, but one should at least have a talent for it.

How much does it cost to hire an accountant, and how good of an investment is it?

Depending upon the area the accountant’s practice is located in, the demand for their services, and the nature of the services needed, one can expect to pay between $50 and $100 per hour. The client may not realize a benefit commensurate with their cost right away. The value of engaging an accountant will become apparent when the client embarks upon a new venture, such as the opening of a new store, launching of a new product line, or investment in another company. The accountant can prove invaluable when the client applies for funding.

And as stated above, an accountant can help the client achieve their financial goals more easily, and save money by means of financial and tax planning. The accountant will also save the client money, or help the client obtain financing, by being knowledgeable about the client's business and finances, and suggesting strategies based on the accountant's knowledge and experience.

Tomorrow's entry: Examples of how Gary Krupa, CPA helped his clients and employers.


Gary Krupa is a CPA in New York and Arizona, with more than twenty-five years experience providing accounting, tax, audit and computer services to small and medium-size organizations. He’s especially attentive to the needs of his clients. He moved to Rimrock, Arizona in late May 2008. He has offices in Rimrock and Peoria, AZ. His e-mail address is gkcpa@q.com.
Read more about Gary Krupa's accounting service by following this link:

The Right CPA, to Help You Win at Monopoly and Business

Why It Makes (Dollars and) Sense to Hire an Accountant to Do More Than Just Prepare Your Tax Return (continued from yesterday)

By Gary Krupa, CPA


A second reason that many small organizations don’t realize their potential is that many owners and directors of these organizations make business decisions based on subjective motivating factors such as emotion, politics, fear or personal enrichment at the expense of the organization. Failure to prepare and maintain a budget, as explained above, is one example. This is where an accountant can be an important ally. The accountant’s objectivity and sang-froid (composure) can help the organization set or maintain a sound financial course.

The economy of the Verde Valley in Arizona, where I have my practice, is made up of several large companies and many small mom-and-pop-type companies. For the small companies, there’s a serious need for more financial wisdom and sophistication, so that they’ll find it easier to become big companies. The big companies usually have entire accounting staffs. Yet even they sometimes need help from an outside specialist.

Tomorrow's entry: the cost of hiring a good accountant, and why it's well worth it.


Gary Krupa is a CPA in New York and Arizona, with more than twenty-five years experience providing accounting, tax, audit and computer services to small and medium-size organizations. He’s especially attentive to the needs of his clients. He moved to Rimrock, Arizona in late May 2008. He has offices in Rimrock and Peoria, AZ. His e-mail address is gkcpa@q.com.
Read more about Gary Krupa's accounting service by following this link:

The Right CPA, to Help You Win at Monopoly and Business

 

Why It Makes (Dollars and) Sense to Hire an Accountant to Do More Than Just Prepare Your Tax Return (continued from yesterday)

By Gary Krupa, CPA



The budget is another useful planning tool. This enables the organization to achieve its goals by knowing what they are and documenting them. The budget gives an individual or organization the best chance to achieve its goals by setting realistic targets concerning revenues and expenses, and then comparing the actual results with the desired or expected results, on a regular basis. The budget also helps the organization maximize its revenues and spend its money more productively.

Organizations and individuals usually don't prepare or maintain budgets because they don't want to know the details of their finances. They believe that a budget will reveal to them how little money they have and depress them. This was the reasoning given by Oprah Winfrey when Suze Orman appeared on Oprah on October 13, 2008 to give budgetary advice to Oprah's guests. However, unless someone maintains a budget, they're not in a good position to make sure that their expenditures don't exceed their income.

Tomorrow's entry: How an accountant can help you make more effective decisions, with financial wisdom, composure, objectivity and sophistication.


Gary Krupa is a CPA in New York and Arizona, with more than twenty-five years experience providing accounting, tax, audit and computer services to small and medium-size organizations. He’s especially attentive to the needs of his clients. He moved to Rimrock, Arizona in late May 2008. He has offices in Rimrock and Peoria, AZ. His e-mail address is gkcpa@q.com.
Read more about Gary Krupa's accounting service by following this link:

The Right CPA, to Help You Win at Monopoly and Business

Why It Makes (Dollars and) Sense to Hire an Accountant to Do More Than Just Prepare Your Tax Return (continued from yesterday)

By Gary Krupa, CPA



It also helps to understand what prevents many small organizations from achieving their potential, to understand the full value of an accountant to an organization.

First, because many owners and directors are preoccupied with increasing revenues or managing their staffs, they neglect to make detailed plans for their financial success. “Be Prepared” is the Boy Scout motto, and it applies equally to business planning. Such a plan requires making informed decisions based on knowledge of market conditions, the organization’s recent financial history, and the organization’s financial goals.

One of the tools used by accountants to develop a financial plan is a projection. This is an estimate or set of prospective financial statements prepared using one or more assumptions. A similar tool is the forecast, which presents the entity’s expected financial position, results of operations, and cash flows.

These reports, in addition to financial statements prepared on a historical basis, help not only with decision-making, but also when applying for outside financing, such as with a bank loan. They help the organization’s management know what to expect well in advance of important developments, whether positive or negative. The management is then better prepared to take effective action to increase revenue, reduce costs, reduce taxes, or avoid costly financial setbacks.

Tomorrow's entry: The Budget: Setting realistic goals and achieving them with the help of an accountant.

Gary Krupa is a CPA in New York and Arizona, with more than twenty-five years experience providing accounting, tax, audit and computer services to small and medium-size organizations. He’s especially attentive to the needs of his clients. He moved to Rimrock, Arizona in late May 2008. He has offices in Rimrock and Peoria, AZ. His e-mail address is gkcpa@q.com.
Read more about Gary Krupa's accounting service by following this link:

The Right CPA, to Help You Win at Monopoly and Business

Why It Makes (Dollars and) Sense to Hire an Accountant to Do More Than Just Prepare Your Tax Return (continued from Friday)

by Gary Krupa, CPA


The business owner or director of an organization should meet with the accountant at least a few times a year, even if the only services they require are tax planning and return preparation. This is because the accountant can better advise their client regarding tax saving strategies if the client makes the accountant aware of their financial situation on an ongoing basis.

Accountants are superbly trained to create and maintain business systems, especially accounting systems. This provides an organization with a solid financial foundation. Think of the footing laid by a mason when building a retaining wall. The footing prevents the wall from collapsing in a monsoon, or when mud places pressure against the wall. In much the same way, an accounting system is an important element of a good system of internal control, which makes financial reporting more reliable, and minimizes the possibility of theft or collusion.

The management of an organization, especially one that's expanding, depends upon their accountant to help them interpret the raw bookkeeping data in a meaningful way, so that the management will be better able to make sound business decisions.

Tomorrow's entry: What prevents many small organizations from achieving their potential, and how an accountant can help an organization achieve theirs.

Gary Krupa is a CPA in New York and Arizona, with more than twenty-five years experience providing accounting, tax, audit and computer services to small and medium-size organizations. He’s especially attentive to the needs of his clients. He moved to Rimrock, Arizona in late May 2008. He has offices in Rimrock and Peoria, AZ. His e-mail address is gkcpa@q.com.
Read more about Gary Krupa's accounting service by following this link:

The Right CPA, to Help You Win at Monopoly and Business

Why It Makes (Dollars and) Sense to Hire an Accountant to Do More Than Just Prepare Your Tax Return (continued from yesterday)

by Gary Krupa, CPA


Yet except for engaging an accountant to prepare their income tax return, or helping to minimize their tax liability, many owners of small businesses and directors of non-profit organizations don’t perceive any tangible benefit to hiring an accountant. An accountant doesn’t generate revenue the way a salesperson or the owner can. An accountant doesn’t produce the products or services sold by the organization. Nor does an accountant provide the business with office space or the ability to make telephone calls, the way a property owner and the telephone company can, respectively.

As for financial management, in rural areas business owners and organization directors think that hiring a trained professional to help improve the bottom line is an expensive luxury they can't afford. The owner or director believes they can do the bookkeeping themselves when funds are limited, or that they can hire a friend or relative whom they don’t have to pay much money to. Or they’ll hire an accountant to do mostly bookkeeping work.

Put briefly, the owner or director reasons that hiring an accountant to do accounting work, outside of tax season, would only be a waste of money that the organization can spend productively elsewhere.

To be sure, accountants are usually the best qualified to prepare tax returns and reduce a client’s tax liability. Nonetheless, there are some other important ways that an accountant can help increase profits or net revenues, generate positive cash flow, and reduce operating costs.

Tomorrow's entry: How the accountant can help an organization establish a solid financial foundation.


Gary Krupa is a CPA in New York and Arizona, with more than twenty-five years experience providing accounting, tax, audit and computer services to small and medium-size organizations. He’s especially attentive to the needs of his clients. He moved to Rimrock, Arizona in late May 2008. He has offices in Rimrock and Peoria, AZ. His e-mail address is gkcpa@q.com.
Read more about Gary Krupa's accounting service by following this link:

The Right CPA, to Help You Win at Monopoly and Business

Why It Makes (Dollars and) Sense to Hire an Accountant to Do More Than Just Prepare Your Tax Return

by Gary Krupa, CPA


When embarking on a voyage into unknown territory, it makes good sense to avail oneself of the services of a guide or sherpa. This is someone, usually a native of the territory, who understands the local customs and geography, and who possesses the skills necessary to help the traveler successfully navigate the territory by avoiding serious mishap. A sherpa, according to Your Dictionary.com, is "a member of a Tibetan people living on the slopes of the Himalaya Mountains in Nepal, known for their endurance at high altitudes and often serving as guides for foreign mountain climbers."

Indian guides were common when the first white settlers arrived in America. If you’re familiar with the story “The Last of the Mohicans”, by James Fenimore Cooper, you probably remember the character of Hawkeye, otherwise known as Nathaniel or “Natty” Bumppo. Although of the caucasian race, Hawkeye is perhaps the embodiment of the ideal guide: someone who has easily adapted to the wild frontier, is highly skilled with a rifle, and has earned the confidence of both the Indian and the White Man. He escorted Cora and Alice, the daughters of the British Colonel Munro, through hostile Indian territory. He was about as cool-headed as anyone charged with such a dangerous mission could’ve been.

In today’s business world, an accountant is especially well equipped to play a similar role. An accountant can help an organization succeed by applying his or her skills and experience to its financial management. Accountants have savoir-faire, or expertise, when it comes to objectively analyzing their client’s financial affairs and taking effective action. Another strength that accountants and bookkeepers have is the ability to organize financial records in the most meaningful way. These qualities can be invaluable to a small organization seeking to become a bigger one, or to one struggling just to maintain solvency in the troubled economy we find ourselves in.


Tomorrow's entry: why many business owners and organization directors don't hire accountants, and more about what the advantages are to hiring one.


Gary Krupa is a CPA in New York and Arizona, with more than twenty-five years experience providing accounting, tax, audit and computer services to small and medium-size organizations. He’s especially attentive to the needs of his clients. He moved to Rimrock, Arizona in late May 2008. He has offices in Rimrock and Peoria, AZ. His e-mail address is gkcpa@q.com.
Read more about Gary Krupa's accounting service by following this link:

The Right CPA, to Help You Win at Monopoly and Business