What's in a Name?!

When my daughter (who happens to be typing this in for me today), Michelle and I started our little practice we spent a long time coming up with our name. Eventually we selected the name of Tailor Made Business Solutions, PLLC. No this was not because I love golf but Michelle felt that through my career I never approached a client’s needs with a predesigned or cookie cutter blueprint or design. But rather I tried to design processes and procedures that were tailored to the way they thought and did business without sacrificing the disciplines necessary to provide sound financial recording and reporting for them and outsiders who relied on this valuable information.  Additionally, with Michelle's prior background in Human Resources, we really could go in and meet all their needs if necessary.

However, as of late though, we are both beginning to rethink the name. Why you ask, well we get a lot of requests for quotes on anything from alterations of suits for men, hemming a dress, to the actual fabrication of custom and tailored made clothing for all genders and ages.

Now I have a dry sense of humor which most people do not always appreciate. Therefore I don’t turn these people away. So my stock answer to any of these people who call because they did not get past the first word tailor is that I will do the job for $5,000. There is always dead air after this quotes, so I quickly jump in to tell them what the business is really about and once I take a course in Tailoring (cost of $4,500) I would be more than happy to try and help them.

Any takers on two horrible seamstresses tailoring your clothes?! ;)

How to make your accounting software payoff

Most Small businesses use QuickBooks and or Peach Tree to prepare their books and records. Some try to perform the necessary bookkeeping tasks themselveswhile others employ bookkeepers. At the end of the year these same companies employ a CPA to prepare their tax returns from these very books and records. Unfortunately, many business owners and bookkeepers are not current with Generally Accepted Accounting Principles (GAAP) and tax regulations. Nor do they know the difference between the two. Thus, when a small business has to convert from one to the other to either prepare a financial statement to borrow or expand there business they will have to engage a CPA to prepare the conversion. Moreover, in many cases the entries made by an outside CPA to prepare the tax returns never find their way into the books and records of the company causing the Company to be totally reliant on the continuity of the third party providers. Consequently, by not  not requiring that all adjustments made by third party providers get included at the time of creation , along with the supporting documents,  valuable and costly information becomes lost permanently.  This becomes extremely worrisome if ever the company needs audited financials, is being audited by federal or local tax authorities, etc.

The above scenario is usually created because many business owners feel that they are saving money by not engaging an experienced CPA who knows how to configure the software properly while at the same time developing processes and procedures that insure compliance with both tax and GAAP accounting so that when the final entries are made the data can be automatically created to prepare GAAP reports or directly uploaded into tax software in a manner whereby the returns are like ivory soap 99.99% pure. Sounds impossible or too good to be true maybe a few years ago but today these small software packages can do what is being done for some of the larger businesses throughout the world who utilize , to name a few, SAP, Oracle. PeopleSoft, Great Plains, etc. All you need is a CPA that understands the capabilities of the system and knowledgeable enough to work with your existing CPA and or bookkeeper who do not or choose not to involve themselves in this manner. The investment to implement pays dividends in the future.

Book Keeping Versus Accounting

Do you understand the numbers and information prepared and presented to you by your bookkeeper. Have you ever truly understood how to evaluate and manage cash flow?  Have your ever tried or attempted to develop a breakeven for your business that will alert you to problems when revenue drops and or costs change

In today’s economy we face many challenges that get magnified due to insufficient information and the inability to properly evaluate and understand the numbers prepared by bookkeepers without the proper supervision of accountants, business partners and many times your own banker. If this is true to your business let us help. We are not asking you to change or fire your bookkeeper but without the proper guidance most bookkeepers are merely transactional in nature and do not  know how to work with the business owner or operator in evaluating the effect of business decisions made and being currently being utilized on their cash flow or income before taxes. Operating a business is tough enough under normal circumstances but in Arizona, we face the additional challenge of keeping everything together during the shoulder months between June and October. The chief cause is that many businesses do not utilize sound cost and operational controls that are firmly based upon an accurate break-even analysis. Additionally, most businesses do not even know how to set up their books and records to allow them to calculate what their true break-even is. Understanding this one metric is often the difference between staying in business and failure.

CPA's can work magic or better yet make you look better than you are.

Another myth surrounding CPA's is that they can always get the desired result. How many of you fellow CPA's have been asked to produce a report that reflects super financial results (need a loan, sell the business, get better terms from a vendor) but make sure that they, the client, do not pay too much tax?

The CPA's they are looking for wear pinstripes ( and not the New York Yankee pnstripes) and are usually married to some big guy(gal) with rippling muscles. Since, and I am pretty sure about this, I do not look good in stripes or a wedding dress, I always tell such clients' that I can only report the results as they transpired and will try to make sure that we do all of the things we can to legally minimize taxes and reflect the true operations of the business. Additionally, going forward, we will work closely to help them understand their business, control costs, minimize taxes (legally), maximize cash flow, negotiate better terms, improve operations and systems, and prepare informative information to manage the business better but refrain from magic tricks and /or perform plastic surgery as I want to create a lifetime partnership with them.

So in other words, I will see you in the dug out but not behind bars!

Not all CPAs are Tax Experts - Fact

How many times have you been at a cocktail party and someone asks you what your profession is? Now you announce that you are a CPA. What happens next, 15 people come up to you with Tax problems. What makes them think I am a tax expert just because my designation is a CPA? Although I may be well versed in taxes, there are many types of CPAs. There are ones that are in general business, one that work with audit and compliance, some may even work with tax, some who are just general accountants that prepare SEC reports, and here is the best one yet, Some may have been retired for the last 10 years and now use practicing CPAs to do their own Taxes. So next time your at a party and some one announces that they are a CPA, find out what they specialize in. Because Obviously you wouldn't ask a proctologist to check your throat! That is all I have to say on this topic. There will be more to follow.