Accounting Professionals: Are The Necessary?

Does your business needs an outside accountant?

It all depends. If you require an audited or reviewed financial statement, then, yes, you need a CPA. In any event, it is always a good idea to maintain a relationship with an accountant no matter how small your business. Whether your accountant is a CPA is up to you. The real question is: To what extent do you need outside accounting services? That also depends on you and the nature of your business.

I always start with the admonition: The Buck Stops With You! You cannot afford to dissociate yourself from understanding the meaning of your financial statements. If you solely rely on your accounting staff or accountant for completely accurate financial data, then you are asking for trouble. If you are going to own or manage a business, then you have a responsibility to learn how to speak the language of business. The language of business is accounting knowledge.

How involved you become in the accounting process will be determined by time schedules, your mental pre-disposition, desire for control, cash flow, etc. One scenario, if you can afford it, is to hire an internal accounting staff to prepare financial statements on a monthly basis and have an external accountant check them over. Another common scenario is to prepare part of the compilation yourself, such as preparing a sales journal and a cash disbursements journal, and then hire an outside accountant to prepare a bank reconciliation and the financial statements for you. Some do this on a monthly basis, others quarterly. Some business owners do the books themselves all year and turn them over to the accountant at the end of the year to verify the balances and do the depreciation entry for tax purposes.

There are numerous ways to work with an accountant. Regardless, you should learn enough about accounting to be able to communicate intelligently with your accountant. Since you are intimately involved in your business you may recognize danger signals that not even your accountant will see.

Selecting an accountant

Relying on the yellow pages to find an accountant can be risky. The best way to find any professional is by a referral. However, you need to interview prospective accountants before signing on. One of the first priorities is to find out what their experience level is. Your business may have very specific accounting and tax issues that require a certain amount of expertise. Perhaps you have a manufacturing concern. What does the accountant know about raw materials, work-in-process, and finished goods inventory accounting? Does the accountant know how to set up job-costing and overhead burdens? Ask for references from other like-kind businesses.

Keep in mind, that you may go to an established firm with a good reputation, but with whom are you going to have a relationship? Is your account large enough to warrant a relationship with a partner? You need to feel confident with the person assigned to your account. Perhaps a smaller firm with four or five accountants who are all seasoned veterans might work better.

You will also want someone with whom you can relate. The ability to communicate is a crucial factor. Your accountant may be technically proficient but can you understand what he or she is telling you? Does he or she listen when you ask questions? Don’t be afraid to ask for someone else if you are having difficulty communicating.

Another important criterion is “accessibility”. Is your accountant too busy to talk to you? Can you get your questions answered within a reasonable period of time? Do you feel important to him or her? Situations may arise where you need information immediately to make an important business or tax decision, will your accountant respond quickly?

Last, but not least, are the accountant’s billing practices. Billing practices vary from firm to firm. Some firms are very aggressive and put tremendous pressure on staff and partners to bill every minute they can. Some firms require a review process before any work goes out the door. This means that every person who performs any work on your account, including the person who puts the stamp on your envelope, bills you for it.

Find out in advance what happens if you call the firm to ask a simple question that takes less than five minutes to answer. Are you billed for five minutes or are you billed in increments of fifteen minutes even though you only talked for five? Some firms justify this increment billing by explaining that you are paying for the accountant’s expertise that may have taken years to acquire, therefore, they say, it’s worth it.

Some accounting practitioners charge a flat rate for services rendered or a combination of flat services and hourly charges. For instance, an accountant might charge $200 a month to prepare a monthly financial statement but charge $100 an hour for special projects. Within the monthly fee, the client can call to ask questions that last fifteen minutes or less for no additional charge. This way the client is not reticent about calling. Getting your question answered may prevent little problems from later becoming bigger more expensive problems.

Very often projects take longer to complete than anticipated. Complications arise and the practitioner should be paid for his or her work. Always insist that, if there are going to be additional charges over and above what has been agreed upon, that the accountant gets your approval first. Be sure to clarify these procedures before engaging an accountant in an “engagement letter”. This is a document that spells out the responsibilities of both parties and how the relationship is going to work.

Remember, there is absolutely no reason to be intimidated by your accountant. After all, you are paying for the services, and I promise you, the accountant wants your business.

John W. Day, MBA is the author of two courses in accounting basics: Real Life Accounting for Non-Accountants (20-hr online) and The HEART of Accounting (4-hr PDF). Visit his website at www.reallifeaccounting.com to download for FREE his 3 e-books pertaining to small business accounting and his monthly newsletter on accounting issues.

Related Information of Interest:

Celebrity Gossip – Good Or Bad?
People know more about Paris Hilton, than they do President Bush. Celebrities are always in the news for a variety of different reasons. They might be getting drunk, and making a fool out of themselves (Mel Gibson), or getting a divorce (Carmen Electra and Dave Navarro), or almost dropping their baby in the street (Britney Spears). Whatever they are doing, we are all tuned to watch, and listen to the celebrity gossip.

Most of the time the only celebrity gossip that appears on television concerns something bad that has happened, or some mistake a celebrity has made. The public likes to watch figures in the spotlight fall on their face, because it brings them back down to earth with the rest of us. Also it seems that we like to give air time to celebrities so they can complain about the way the government is being run. We can setup a large forum to let celebrities speak about how the war in Iraq is wrong, but we can not take five minutes to tell the soldiers that are fighting there how much we appreciate them for what they are doing. I would like to help change the view about celebrities and write about some celebrity gossip of a different flavor.

Towards the beginning of the war in Iraq, Densel Washington made a trip to a hospital in Fort Sam Houston, Texas to see some of the injured soldiers. While he was there he saw that the hospital was crowded and the doctors there needed more supplies. Densel told the soldiers at the hospital that help would be on the way. About six months later, he gave a sizable donation to the Fisher House Foundation Inc., which helps families of hospitalized military personnel. I never heard any gossip about this on the celebrity news channels. The only time I heard about this great act of generosity was in an email from someone else that was trying to spread the good word. I think we would all feel a little bit better about celebrities if the celebrity gossip shows would try to report on more uplifting stories like this one.

Decide for yourself! Check out the celebrity gossip forum.

Conversation In An Age Of Confusion
What do people talk about when they all believe different things and nobody is sure what the other person believes?

Then you add to that the usual courtesy that most people don’t want to offend other people, especially when it comes to the topics people disagree about with the most intensity, such as politics and religion, which all but the most foolhardy consider way off limits, at least, in what is referred to as polite conversation.

Actually, the silence of the times is far wider. In fact, the silken muffler of a feared indiscretion is wrapped around virtually every significant area of human thought, from philosophy to economics.

So what are we left with? Certain relatively safe topics, like poetry, unless you’re among poets whose egos are hair-trigger ready to fire back their own preferences vehemently. History might also be a good bet, since the overall tale has been pretty well agreed on, unless, once again, you’re with historians who may be simmering with their own disagreements.

The result? Conversation generally defaults to entrancing topics like the weather. Many spend entire evenings discussing such substitute content as one trifling entertainment or inconsequential entertainer after another. Things get really exciting when someone happens to mention how someone else may look tonight. Then there’s always the daring raconteur who’s arrayed with an evenings worth of sexual allusions.

Listening to such excited vapidity, one’s mind wanders to the legendary salons of France, at their epiphany, home, we read, to forthright conversation about the headiest topics of the time, generally centered around the new insights and old illusions of The Age of Reason.

At vagrant moments, you cannot help but ask yourself if the human race ever get to another time when it has enough beliefs in common to enliven its social occasions with conversations that really are interesting.

Tom Attea, creator of Newslaugh.com, has had six shows produced Off-Broadway and has written comedy for TV. Critics have called his writing ""delightfully funny" and "witty" with "good, genuine laughs."

Russia Defends Iranian Nuke Program; Considers Position Good Customer Service
While the civilized world has reacted with horror at Iran’s plan to harness the energy of the atom, as in bombs away, Russia has steadfastly defended the menacing mullahdom’s nuclear ambitions.

At first, any person distinguished for responsible behavior is taken back by such apparently reckless advocacy, not only because it seems wildly risky, if not outright self-destructive, but also because one does not expect it from people who have decided to present themselves as such reformed friends of humanity and trustworthy politicos that they dress in spiffy garb, instead of in their former universal drab.

We, however, turn to the hard-learned observation that, if anybody’s behavior doesn’t’ seem to make sense, you probably just don’t understand what his or her goals are.

Seen this way, the gremlin in the Kremlin is as obvious as the red power tie we often see dangling from Vladimir Putin's neck. Iran buys weapons from Russia and will now buy enriched uranium, too, and Russia is just servicing the customer.

As V. P., who brought order to Russia by ordering his Russian cohorts around, said, “Once when I was in the KGB and didn’t have a lot to do, I read about the American department store tycoon, John Wanamaker, who once told a clerk, ‘When a customer comes in, forget about me.’ So when Iran comes up, I forget about everything but putting the customer first. It seems like the capitalist thing to do, and in the modern Russian economy, I think there’s at least room for that much free enterprise.”

One would think that there would be some awareness of the geographical limits of his enthusiasm. After all, Russia is a lot closer to Iran than we are. There are also other inescapable aspects of the client relationship that ought to be considered, among them that Vladimir and his gangsta-rich associates look as much like infidels to the Iranians currently steering their ship of state toward the reefs of war as we do.

What Lenin once said about capitalists apparently also applies to reformed communists: they would sell you the rope to hang them with.

Tom Attea, creator of Newslaugh.com, has had six shows produced Off-Broadway and has written comedy for TV. Critics have called his writing ""delightfully funny" and "witty" with "good, genuine laughs."

Getting Into Your Desired Job Position
When we look for a job, we wanted to be working in the field we specialize or plainly have an interest with so we can utilize our knowledge and talent. Some of us successfully got what they want while others looked for different fieldwork due to different circumstances.

In these days, it is hard to look for a job. Employers look for an edge that makes you different from the rest. Moreover, the edge that employers look for is experience. When applying for a job that you desire you must at least have the experience or have knowledge on the position you are applying. However, when an employer sees that you have the potential, they will provide a free training for the position we applied.

How employers knew who would fit for the position? The answer really depends on us applicantsï¿½ performance during the application. When we pass our resume either online or walk-in, the employer must get a good impression from the resume that we submitted. What we wrote in the resume is what exactly we can offer to the company, so be careful not to be too arrogant in making a resume, be precise, limit yourself on what you know. Never put anything in the resume that we actually do not know.

When an employer likes what he sees in your resume immediately he will ask for an interview, now during the interview it is ok to be confident but not too much. Just be yourself, if you do not know the answer to his question just politely say you do not have any idea. Just make it a point that the employer sees in you the interest in the position you are applying, and it is enough for the employer to hire you.

From the job given to you, we must learn from it, not just work it. Learn how to enrich your knowledge. Never stop, always aim higher, take it gradually to the position you really wanted to achieve.

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