Full Control Accountants

[ILLMAS]

One of my clients called me today a little concerned about a discussion she had with one of her customers who happens to be an accountant, the accountant told her, "you know, your accountant can make you or break you'. So she asked me, so what do you think about this? I told her that is true, an accountant can make you or break you if you give them full control of your accounting, and when I mean full control, you allow them to write checks on your behalf and sign them or they ask you to pre-sign blank checks and they care of everything. I told her, so don't worry, you are pretty much responsible of all your business activity, you pay the bills, so your accountant (me) cannot break you. :-)

Geesh, how come I never receive a call like, how much do I owe you, let me send you a check LOL.

[kcjenkins]

I expect what he meant was that good accounting advice can make a huge difference, ASSUMING the client actually follows it. Therein lies the problem though. We all know how often clients listen to us, then go out and do only the parts of our advice that they like, but omit the parts they don't. Then cry when we have to explain that because they did not do ALL of it, in the right order, they did not in fact get the tax advantage we had discussed.

[JohnH]

You mean like the client who closes on a rental property and then calls the next day to ask "Can you recommend someone to be a Qualified Intermediary for me? I want to do one of those Like-Kind Exchanges you told me about."

[kcjenkins]

Yep, those are without a doubt the most screwed up of all the tax-planning items I can think of. Heck, half the time they don't even remeber that they need a QI at all, they just come in in Feb or March and say "Hey, I sold that rent house back in Dec, and now I want to do one of those tax free deals and buy a car wash with the money."

[Janitor Bob]

Yep, those are without a doubt the most screwed up of all the tax-planning items I can think of. Heck, half the time they don't even remeber that they need a QI at all, they just come in in Feb or March and say "Hey, I sold that rent house back in Dec, and now I want to do one of those tax free deals and buy a car wash with the money."

Or they use the knife to spread the peanut butter then use the same knife in the jelly without rinsing it...getting peanut butter in the jelly.....Oh...wait...that is my daughter...not clients...oh well...still irritating.

[taxxcpa]

When I read about how good accounting makes you money, I think they are oversimplifying it. If you have no idea what your income and expenses are, it is possible that good accounting could make you aware of things that you need to change.

However, if you keep no records whatsoever but buy low and sell high in your business and don't spend any money on non essentials, then good accounting won't increase your income.

Letting your accountant write the checks, make the deposits, etc. is not good internal control, but if the accountant doesn't steal the money, then it won't matter, but I would never recommend letting one person have complete control of the cash flow through the business even if the person does not steal since any shortage would look like theft even if it were not.

[jainen]

>>your accountant can make you or break you<<

To be fair, remember that you can cause your accountant a whole lot of grief too.