The importance of bookkeeping

@alangeh I agree-I've unraveled years of accounting errors and I can gladly attest that it takes much more time to reconcile items in the past. The longer they go unreconciled, the more difficult it is to straighten out the books. Sometimes, I have found that the lack of reconciliation deals with lack of resources, an unwillingness to invest time into the issue, or to cover up fraud. There's a business I dealt with that didn't want to recognize more losses than they already had, so they were loathe to reconcile further so as to prevent expenses from being booked. I'm a business consultant and studying for my CPA (using UWorld Roger CPA), and am a big fan of "reconcile it now/deal with the issue now".
 
@alangeh I hired am accountant bookkeeper and had a horrible time. I am a small landscape design business. All my expenses are through credit cards and debit that go directly into quickbooks software. I was being charged $270 a month and he would miss meetings, not run payroll for several weeks at a time. And when he does run payroll I cant find any evidence that taxes are being taken out/accounted for. I'm the only employee and I'm paying myself so I'm seeing th money going out is the same as the money going into my personal bank accountant... so no taxes paid. I have no idea where to even start to look for a new trustworthy accountant. Any tips on where to look besides just googling?
 
@dahmworg Honestly your network is your best friend. Maybe a client knows someone or you can probe a bit to see what they do for a living. Another option is any other businesses in the area that utilize it. In all honesty, $270 is a lot if they aren’t doing payroll correctly. Quickbooks has their own system in place to do payroll, especially if it’s just you.

If all network options are exhausted, Fivver isn’t a terrible choice. But make sure you properly vet them. You don’t need a CPA, just someone to handle the books once a month for an hour or two and be available for when they have questions about what’s taking place inside your business. Best of luck
 
@dahmworg You want someone who can demonstrate a strong understanding of accounting and business taxes. Some of us regularly answer questions in r/bookkeeping for that purpose. Client references also help.
 
@alangeh While I totally agree with everything you said here I've had this problem for a while now.

1) As a small business, I don't do enough volume of transactions or inbound and outbound to merit a full time book keeper, so it falls to me.

2) It's not revenue generating, so I spend 2 hours doing it once a year when I need to since it doesn't improve the fundamentals of the business anywhere else.

3) I see an annual tax accountant to deal with it who doesn't look at any of the paperwork I've prepared either way.

I've seen multiple accountants and they all just want the easy shit. They want a W2 and maybe a few itemizations and to just stamp shit.

And if it's more complicated than that, they want $1000/mo retainer for their name PLUS hour for all the time they spend keeping QuickBooks or whatever clean.

So while you're bitching at this guy for ignoring some work and getting a 15k bill, he avoided a 75k+ expense over the last 5 years by leaving it alone.

He owes the taxes either way, plus the penalties, but it's actually coming out to a pretty similar expense here. I can't say I fault him.

I've yet to talk to an accountant who did a writeup or a simulation for me that didn't miss at least one MAJOR credit/deduction/mistake that actually really shifted things.

The last guy I had reviewed some previous tax returns I filed and said "Yea, these are filed correctly", without having looked at the corresponding financial records.

Honestly, a lot of small businesses would be GREAT if there was a financial and tax guru involved, but a lot of small businesses just don't have the ability to pay what they're going to charge for that kind of services.
 
@tkchapin Totally get it. CPA’s can get expensive, especially for smaller operations, it simply isn’t worth it. And even for an accountant, quickbooks is not all that intuitive. So there seems to be a gap between small business owners and quickbooks.

For this client specifically, I’d say no more than 25 transactions per month, which isn’t all that much. That’s why estimated $50/month. Should take about an hour or two each month (excluding payroll). It’s tough on the business owner for sure, accounting is probably the last thing that comes to mind. But it’s a warning that although it can put off, it will cost you.
 
@alangeh
CPA’s can get expensive, especially for smaller operations, it simply isn’t worth it.
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But the kicker is, we NEED it more than anyone.

And even for an accountant, quickbooks is not all that intuitive. So there seems to be a gap between small business owners and QuickBooks.
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I got Xero based on this sub, every account I talked to wants me to use QuickBooks instead. But I hear so many horror stories about QuickBooks and the real kicker? The accounts I've worked with didn't even fucking look at it! It was always "Hey, real quick, how much did you spend on supplies last year?". Like why should I bother and what am I paying you for?

It’s tough on the business owner for sure, accounting is probably the last thing that comes to mind. But it’s a warning that although it can put off, it will cost you.
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I actually disagree with your warning though. I mean, I don't, but it isn't costing this guy. Remember, he saved 75k by NOT having an account for 6 years. You hitting him up for 15k one time and 15k in fees/penalties, He's coming out ahead 45k!

Accountants either need to become more affordable or more valuable, either one!

But if I need to pay you $1,000/mo PLUS time spent on the actual books for you to miss tax credits, write-offs and other things and not be able to tell me my burn rate or overall margins/financial health, like WTF. That's literally a fucking scam.

If you're costing me $1,000/mo I need some kind of return there, otherwise I'm going to just do like I am now, spend 2 hours a year doing my Xero and handing my taxes to the cheapest accountant I can find.

I think accountants are long overdue for an adjustment in the value prop of their field.
 
@tkchapin No doubt small businesses need it the most, unfortunately quickbooks is the best option at the moment. Xero is ok, but the problem is adjusting entries, virtually impossible to do so when we need to.

Most tax accountants do not verify numbers, it’s not our responsibility to do so. That’s attest services or audit. The numbers you give us on the trial balance is what we’ll use.

In my example I omitted foreign filing requirements which subject the client to a $10k penalty per year including penalties. The client will not come out ahead in any situation. Since it will cost more to fix the books, file late returns, and pay the penalties, the fees associated with proper bookkeeping and filing could have saved the taxpayer thousands. If you’re getting quoted for $12k/year for a tax accountant you’re being scammed unless your return is quite complex, like multiple passthroughs or C Corp with foreign filing requirements.

If you’re a simple LLC with good books, $12k is just way too much.
 
@alangeh It's 12k to get them to be apart of the business, plus hourly to do the books. They're "CFO as a service".

I'm not getting lower offers AND the others in the post here are agreeing saying $50 is laughable for monthly bookkeeping when they charge 3x-20x that.

But you just did exactly what every account has been doing to me. You left important stuff out and didn't present all the information.

Me handing my accountant my xero at the end of the year, I know this, is fucking useless! Why? Because if I did my xero wrong, it's all wrong.

If the account spent the few hours with me right now, and we worked through the questions I had, the xero could be kept near perfect to make his job easier, but they all just want to go back to their little hole and hide and come out once a year to hand me a tax return. Which is again, incorrect, because you won't answer clearly whether this item should be an expense or an asset or a COGS.
 
@tkchapin Ah I see. That makes sense then why you got quoted that much. You sure you need all that? Seems your frustration can be solved by digging into some Accounting 101! Where you get to make sure your numbers are right. Or pony up for a solid bookkeeper.

Some are agreeing with the $50 - but again, like I said and as you conveniently omitted, it depends on the scale and complexity of business and transactions. This particular case had
 
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