When you casually mention to your friends, “I have an appointment with my accountant,” they may roll their eyes in that way that suggests you are affecting the ways of the rich and famous, drinking champagne on a soft drink budget. In fact, the “one percenters” have hidden a great secret in a very obvious place: Hiring a professional accountant to review your family’s finances probably will pay for itself. A professional accountant will put more money in your pocket, first, by reducing your taxes and generating a more robust tax refund, and later by increasing your cash flow and generating greater returns on your investments.
The five best reasons to hire a family accountant
When you hire an experienced, reliable personal accountant, she will…
• Control your expenses. Many of your peccadilloes cost you a lot of precious cash. Although they remain invisible to you, your costly quirks immediately will be apparent to your personal accountant who will help you decide what to keep and what to cut. More importantly, your personal accountant will audit all of your personal and professional operating costs, looking for ways to minimize your variable expenses, get better values in routine business services, achieve economies of scale, and make strategic purchases guaranteed to save money over the long haul. A good personal accountant immediately will become your very best very-frugal friend.
• Plan, manage and prepare your taxes. Especially if you are the sole proprietor of a small business or cottage industry, you should engage a personal accountant. Popular software programs may guide you to hidden deductions and maximize your refund, but they do not guarantee your compliance with either the tax codes or the best practices for controlling taxes. Self-employment, payroll or inventory taxes threaten to blindside you, and home office expenses frequently trigger audits. A personal accountant assures your compliance with all the laws even as she wrings out maximum value from every legitimate deduction. Your personal accountant also can show you perfectly legal ways to shelter much of your income from taxes.
• Improve your cash flow. Yes, improved cash flow comes as a natural result of cutting costs and minimizing your tax liabilities, but the process includes a third step: Your new-found savings do not instantly and automatically become disposable income; they do not become your new slush fund for trinkets and baubles. Instead, they become your capital expansion fund. Your personal accountant will show you where to save or invest your money to earn significant “ROI”—an acronym designed for use with your friends and meaning “return on investment.” Test your accountant’s business acumen against average earnings on bank accounts, annuities, equities and real estate. As long as you are holding your own against the averages, you are doing well.
• Guide your long-term investments. In order to secure your family’s financial security and pay the foundations for genuine wealth, you must pursue xxx goals: save for your children’s college expenses, save for your own retirement, retire your home mortgage, and secure your legacy. You will establish the framework for college and retirement savings by taking advantage of tax-deferred savings plans, but they alone will not meet your objectives.
• Teach you to do your own sophisticated accounting. A really skilled, client-friendly accountant will work his way out of the job, showing you how to do what she does at each step of the process. When she automates your family’s budget, she will guide you from installing the software all the way to encrypting and storing your data on the web. Whatever she does, at first, she will make you sit by her side as she does it, and then she will tutor you as you do it yourself. In the end, you will have saved so much and become such a proficient money manager that your accountant’s services will have paid for themselves.
The rich are (a little) different.
F. Scott Fitzgerald may or may not have been right about attitudes among wealthy people, but he was right that they are different. The rich manage their money instead of letting it manage them. They solicit advice and guidance from professional accountants, and they use what they know to make the money they have generate more money for their heirs. The rich are not different because they have more money; they are different because they understand how to make more money.
Shelby Nichols writes for financing web sites and blogs nationwide. She writes for http://www.accountant.org where you can find out more about using an accountant for your business.
I completely agree with this article and it is so important to work with a professional accountant who knows what he or she is doing. Paying for an accountant can actually save you money too when considering the amount of tax that can be saved by using the accountants knowledge of allowable expenses and other allowances that can be used to reduce the tax burden.