CPA or DYI? Keeping your own financial business records might be easier with a little help from a professional.
Anita Goodrum, CPA, a member, Watkins, Ward & Stafford, PLLC, Eupora, said problems can arise when clients make errors inputting financial information into software programs like QuickBooks or Peachtree.
"Some clients definitely want to do their own bookkeeping," Goodrum said. "The way I look at it, it is our job to help them do it right. Granted, it would be easier if we did everything, but we are here to make our clients happy. The old adage, 'Just let me do it all myself,' doesn't always work."
Goodrum said the problem is clients are not accountants and every year there can be a lot of cleanup work needed to file a tax return accurately. Her advice to owners of a small business who want to keep their own books is to get help from a qualified CPA up front. That can save a lot of time and money instead fixing things on the back end.
Of the software programs out there, she prefers QuickBooks. It is readily available off the shelf, inexpensive, and easy to set up.
"It is the best deal for your money out there," Goodrum said. "There is not a whole lot of other programs to choose from. There are a lot of other programs, but they are more expensive and too difficult to understand for most business owners. I do recommend QuickBooks for people who do want to keep their records. They come up here, and we set up their chart of accounts."
Goodrum said many accountants don't like QuickBooks because it is so easy to mess things up and do things "that make accountants tear their hair out" like accidently hitting 2025 when they meant to put in 2015 as the date.
"There are just little quirks like that you have to be aware of as an accountant when dealing with it," she said. "We look for things clients might have keyed in by error."
John A. Brown, CPA, a professor at the University of Southern Mississippi Gulf Park Campus, who also has a private CPA practice, agreed that QuickBooks is the best choice in most cases.
"Quicken is a good system for individuals to accumulate data, but it doesn't give you the financial reports that can be generated out of Quickbooks," Brown said. "I've had clients bring in Quicken, and I go through and analyze it. But it doesn't give you profit and loss statements. QuickBooks is more detailed than the Quicken program. You can generate various reports out of QuickBooks that will help clients manage their businesses better. It allows you to take different components of business, segregate them, and have better reporting that will help you with management."
Brown also favors clients using QuickBooks or similar software programs get supervision from a CPA firm, including help with setting it up and training.
"It can be daunting if you have no accounting background at all," Brown said. "But you can train office personnel to do basic accounting, print checks, code checks and generate financial statements. The CPA can then come in and go over the financial statements with the owner of the business."
He has one caution with accounting software and IRS examinations. The IRS will want a copy of the accounting software.
"The problem with that is when the I RS gets a backup of your accounting software, it will be not just for the year they are auditing, but all prior years," Brown said. "There are concerns if there is any information in there that should be maintained as confidential such as a taxpayer's customer list. There can also be information in there than might be considered confidential for someone like an attorney or a medical professional."
Brown does highly recommend keeping good records and taking advantage of accounting software to help make management decision and have information available to generate tax returns and for other needs such as loan applications.
Goodrum adds it is always a good idea for small business owners to go see a CPA before end of year.
"After the end of the year, there is nothing to be done except pay taxes," she said. "Be proactive, keep a handle on everything through year, and meet with a CPA before end of year to discuss potential for tax savings."
By BECKY GILLETTE
|Printer friendly Cite/link Email Feedback|
|Title Annotation:||Banking & Finance|
|Comment:||CPA or DYI? Keeping your own financial business records might be easier with a little help from a professional.(Banking & Finance)|
|Publication:||Mississippi Business Journal|
|Date:||May 29, 2015|
|Previous Article:||Young bankers keeping watch on young customers.|
|Next Article:||Adams and Reese names new managing partner.|