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.