Have you fallen victim to the myth about accountants? Accountants are supposed to be the ones who can solve all your financial issues. Collectively that may be true, but individually no so.
Just like doctors, attorneys and engineers, accountants have specialties. If you blew out your knee, would you see a cardiologist? Absolutely not. If your company is pursuing a patent would you seek the advice of a divorce attorney? I hope not.
Just like doctors, attorneys and engineers, different accountants have used special training and experience to become experts in specific areas of their broad field. Did you know that within the accounting profession that there are at least the following specialties?
• Auditing
• Taxation
• Litigation Support
• Forensic Accounting
• Business Valuation
• CFO (business management)
Just like doctors, attorneys and engineers, accountants begin their education by gaining a broad knowledge base. Certain things all accountants should know. The basics serve a building blocks for specialties. Take me for example. I took tax classes in college and received some continuing education thereafter. I understand tax concepts and know many of the issues businesses and individuals face, but that’s the extent of my knowledge. If you need tax advice or help with your tax return, you would be best served by an accountant who has made a career of it.
Many accountants mistakenly look at their clients through the narrow lenses of their specialty rather than taking a broader view or seeking outside perspectives. This can spell disaster.
I have a client who is a prime example. Their tax accountant recommended that to prevent their corporation from paying any taxes at the end of the year, the amount of expected profit should be paid out to the owners as a bonus. The idea sounded good to them because it put extra money in their pocket and lowered their tax burden. Unfortunately, the advice did not take the larger business picture into account. The bonsues drained the company of virtually all of its cash. It started out the new year crippled, unable to pay bills on time or make needed marketing expenditures. Had they been my client then, I would have warned them of the consequences.
The bottom line is, treat your visit to your accountant the same way you treat your visit to a doctor. Understand the general nature of your issue in advance. Choose the doctor/accountant with the expertise that most closely matches your need. Don’t be afraid to get a second opinion.
