Before I say anything else, I want to clarify that I’m not advocating cheating or cutting corners, but I’ve found in my own experience that the difference between a good accountant and a bad one can cost you thousands of dollars. A good accountant recognizes all the costs of running a business, offers tips for good investments (in turn, reducing taxes), and offers advice on how best to grow your personal wealth. Bad accountants miss out on all those things and simply give you a large bill due every year — trust me, I’ve dealt with it.
Taxes are a necessary evil in the course of life, but core to doing business or growing your personal wealth. Rather than dealing with all the good and bad advice on the internet, having an accountant handle the complicated state of my finances reduces the stress I get from doing my own taxes each year and wondering if I did anything wrong. Leave it to the pros so you can focus on the thing you do uniquely well — but, finding a great accountant isn’t easy and after going through half a dozen myself, I’ve got some tips for finding the right one.
After doing my own taxes through college, I’ve realized that most of the off-the-shelf software out there will get you pretty good results. In fact, most average accountants won’t do much better than the software you’re probably using — if you’re happy doing your own taxes and can take the time to research the latest tax laws, you’re a better person than I. Good luck to you.
For the rest of us, we’re pretty busy and we understand that leaving stuff like this to the right professionals can be the best decision you can make. Besides, you go to a doctor when you’re sick and you go to the lawyers when you get sued, why not go to a good accountant when you need to worry about taxes?
Take a look at a typical tax return and you’ll soon realize that there are thousands of ways to interpret the tax rules. It’s pretty clear that filing taxes can be more of an art than science.
Average accountants will take a conservative approach by default. In my experience, only one accountant I know mentioned deductions from retirement accounts or luxury vehicle purchases. (Incidentally, he’s been my accountant for years now.) Note: If you’re getting nervous at the very thought of bending tax rules to your advantage, you probably ought to stop reading immediately — this post isn’t for you. For the rest of you, what you need is a bulldog accountant that has creative ideas on how to bend tax rules to your advantage.
Sure, bending the rules might seem shady but the point is that bending the tax laws is beyond the comfort zone of most people, including me. That’s why you need to find an aggressive accountant to do the work for you (and sign his name at the bottom of the return) — aggressive, while staying safely within generally accepted accounting principles, of course.
The key to finding great people is to ask the best people around you for their contacts — this works especially well if you know a number of successful entrepreneurs. Even if they can’t give you the contact information for the person they use, they’ll surely have some dirt on the accountants to stay away from.
If this doesn’t work for you, the next best option is to simply start combing through the phone book and interviewing. Sure, this will suck up a lot of your time but desperate times call for desperate measures.
Interviewing accountants is pretty straightforward but you need to understand that they will charge you for their time. Don’t start setting up in-person interviews until you’ve whittled the list down to the top 1-2 that you like.
Keep it simple, your goal for the interviews is to understand two primary things:
Get yourself the right accountant today and you won’t be repeating this process for years at a time. Better yet, you’ll save yourself tons of time and money in the long run — and you’ll have a trusted partner to bounce ideas off of down the road. Oh, and one more thing: the really good accountants just happen to know everyone — I’ve been able to get leads for future clients, early access to business owners looking to sell out and references for lawyers, doctors or anyone else I might need for my own plans.
What else do I need to tell you? Stop wasting time, dump your crappy accountants and start getting ahead.
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