Saving Money by Not Hiring an Accountant Can be Expensive

By Gary Krupa

I’ve become aware that there are organizations in the Verde Valley, where I have my accounting practice that will not hire an accountant to help with their accounting or taxes. This has mostly to do with the cost of hiring one. Accounting services for these organizations aren’t considered necessary, except for preparing their year-end tax returns. Even then, many small “mom and pop” businesses use tax software to prepare it themselves, to avoid the cost of hiring an accountant.

I’ve done accounting or auditing work for a few clients who had their financial statements prepared or reviewed by a professional only occasionally or not at all. I’ve noticed that these clients made several substantial bookkeeping or accounting errors. In the event of a tax audit or when applying for financing, these errors may have proven to be costly.

Here’s an analogy that may serve to emphasize the importance of hiring a competent accounting firm:

My wife and I visited a car dealer in Phoenix in mid-January of this year to test drive a Honda Civic Hybrid. The dealership is located on a lot many miles from Highway 17 on Bell Road. There’s no modern-looking dealership building as I’ve seen in California and elsewhere in Phoenix. This one looked like a low-budget operation. Our salesperson told me by phone before we left home that a Carfax report would be provided.

The car handled well and I liked the way it drove. The sales representative was very friendly, although 1) he didn’t appear to know much about hybrid cars, and 2) he spoke a lot about his daughter in China. The dealer, however, used a high-pressure approach to get us to buy the car. When I asked him for the Carfax report, he replied that we could only see a history report if we committed to buying the car. The salesperson said it was because it cost the dealer too much: $49. This to us was a red flag. How could we have confidence in a car we’d be paying over eight thousand dollars for, if we couldn’t review its ownership and maintenance history before we agreed to purchase the vehicle? I suggested to the salesperson that the $49 cost could be spread out over several potential customers, but the salesperson turned a deaf ear to my suggestion.

We visited two other car dealers that day, in what became a stressful and exhausting experience. We finally purchased a lovely 2006 Honda Civic at a good price from a dealer located closer to Highway 17 on Bell Road. The dealership is in a modern building, the service was professional and every desk had a computer on it. The dealership even has an “Internet” department. And the Carfax report? It was made available to us online, even before we visited the dealership.

Here’s the moral of that story for me: if you want to have a successful organization, don’t skimp on services that’ll be worth much more to you than what you pay for them. In the above example, the first car dealer lost a probable sale due to his lack of professionalism and tight-fisted attitude. Similarly, many people avoid hiring a professional to save money. If you do without hiring an accountant, the mistakes you or your bookkeeper make may come back to haunt you. You may think of it as you would an insurance policy.

Here are at least three reasons why I recommend hiring me as your accountant:

• I’m very good at accounting, auditing, taxation, computer technology and problem solving. 

• I want to see my clients succeed, for their sake as well as mine.

• I want to help them solve their financial problems.