View Full Version : Lawyers and CPA's
05-21-2001, 06:41 PM
I am working on my budget and have two line items I would like to get your opinions on...
Can you give me an idea what you needed one of these guys for and what the approximate cost was to consult with them?
Do you continually use them or does Clip or Quick Books generally do the job until Tax time?
I want to know if I should just budget a handful of hours or what. I am going to be a one-man crew for a while, possibly my wife coming in on it as well, but no employees in the foreseeable future!
I can't stress how much help this board has been to me getting this document together! Thanks for all the input and the search option is a huge timesaver!
Great job all of you!
05-21-2001, 06:45 PM
Pay the accontant $100 per month.Shouldn't need a lawyer. Get Phil oe Phagen to write your agreements.
05-22-2001, 05:32 PM
$100 a month at his size???
Send me the $100 a month and I'll throw in the lawyer.
You shouldn't need a lawyer until you screw up. As for contracts, the guys here can help you with contracts. Phil will charge you, and at your size you don't need that expense.
Generally, for a small operation, an accountants fees (at tax time) shouldn't be more than a few hundred dollars.
I agree with John. I'll do it for $90.00 a month LOL If you are using an accounting software such as Quickbooks or using Clip, you should be able to track everything you need & then get the accountant to prepare the taxes. This is if you have the basics down. If you don't have a clue as to the basic accounting principles then make sure you get the accountant's help with setting up those programs correctly for your particular situation. Then after paying the accountant for that, you should be able to get away with having the accountant do the taxes at year end.
05-23-2001, 09:25 AM
I was planning on using CLIP but just as BRL said, I want to be sure I get everything started correctly. I went through two years of accounting in college so I know the basics, just want to be sure I start off on the right foot.
Would you all think that initial set-up would also lend some direction to leasing vs. buying? I know everyone does it differently, but I don't want to lose all liquidity in equipment while at the same time, maintaing a low monthly debt service.
Thanks for the feedback!
05-23-2001, 09:12 PM
You've just left half the group in the dark with that question.... which indicates that you are well along the right track.
There are many different theory's with what you ask. Alot depends on your particular situation. If you have the capital I would suggest buying as the investment will drop to retained earnings. If capital is not readily available then leasing is the way to go to perserve operating capital.
Just starting out (and if I was doing it over again), I'd lease.
05-24-2001, 09:32 AM
I aim to put as many as possible in the dark! Thanks for the feedback. My wife is opposed to getting an intitial CPA consultation and I am for it, but there are much bigger battles to choose, so knowing I feel comfortable with the basics I am going ahead without it.
Any ideas on how to persuade someone to take substantial real-estate earnings and push them into a business? - That's the battle!
05-24-2001, 10:37 AM
If you have the question, go pay for the answer. Around 15 years ago, I wondered about my accounting techniques - pre-computer, all paper recordings. I went to a good CPA ($125/hr, mid 80s prices). Spent almost an hour with her, even discussed software for computerization. She suggested one step that I could add, one that I had forgotten to show but did have with me in data. She very nicely told me I did not need an accountant, and there will be no bill. If you are going to go it alone, go heavy on data retained; better to have too much.
I have a friend with a business much larger than mine. He is going to a REALLY GOOD accountant. Has to go to accountant at least once, sometimes 2-3 times a week. This is so he can be trained to keep proper data in proper order for the accountant to organize his business. Will pay out over $2K to the guy this year, but he has recovered more than that in refiling last 3 years federal taxes.
If you do question your capabilities, in any area of the business, don't be afraid to lay out a few bucks. In my early green industry days, not having time for formal education, I once hired a young golf super for half a day for $100 to go around to my properties and criticize my work. The only thing I learned was that golf turf and ornamental turf were two totally different animals. LOL!! But I did learn that, so the money wasn't wasted.
11-19-2001, 05:43 PM
I have no current affiliation with any accountant or lawyer, however, going thorugh business college, many professors who were also retired CPA's repeatedly said your two best friends in business should be your accountant and your lawyer. You can't argue with that statement unless you have something really good to back it up with.
11-19-2001, 07:05 PM
First, the disclaimer, I am a CPA.
If you don't have much accounting knowledge and you are going to use accounting software, talk to a cpa for help setting up Quickbooks if that is what you are going to use.
The money you pay someone to set it up right will save more than that what you will pay them to fix your screw ups because you had no clue what you were doing and tried to save a few bucks.
As far as using them continually, it depends on how complex your situation is and what you want to know about your financial situation.
Do you want to know where you stand tax wise before April 15th?
Do you want advice about business trends, etc?
If so, consult your account as needed.
Do you understand what your software is showing you?
If so, maybe you don't need to see them so often.
It depends on your circumstances.
Most CPAs will offer an initial consultation for no fee or a minimal fee on the prospect of getting a new client, like you submitting a bid. Obviously, they aren't going to set up an accounting system for nothing.
Another thing, if you are using software and the CPA you are talking to acts like they don't like Quickbooks, etc., you probably should find someone else that knows and is willing to work with your software.
As far as the attorney, consider finding an attorney that you are comfortable with so that if you need one, you aren't faced with picking one on the spur of the moment.
11-19-2001, 07:29 PM
I pay my accountant $200 per month to run my corporate financial statements once per month, balance checkbook, do sales tax reports for state and 2 other cities, general phone advice 2 times per month usually, and file appropriate corporate documents at the right time. I am happy to pay him as I am tired of wearing all these hats, my neck hurts from it.
11-19-2001, 08:25 PM
WE do out own bookeeping and payroll and pay a CPA to do the business & personal tax prep once a year. Cost a few hundred and thats it. I have everything business and personal computerized so data is a cinch.
One caution and you should consult with a tax preparer/cpa before your computer setup. Contracting/service is a differnet animal from the financial analysis aspect than retail. You must structure your cost accounting & possibly chart of accounts different.
I'd also say spend money on a bidding and estimating seminar (2 day) by Chuck Vander Kooi or Jim Huston. It will be the best and most important money you can spend early in your career. Those that haven't done one or are unwilling to spend the money don't understand how expensive ignorance (lack of knowledge) is. One job bid right rather than wrong can pay for the seminar AND you get to keep the knowledge for every job ther after.
Charles VAnder Kooi (http://www.vanderkooi.com)
Jim Huston (http://www.smith-huston.com)
What is screwy about some accounting organization is what is considered overhead. In our business overhead is all the non production costs that keep a businesses doors open every day wether you sell or do any work or not. Overhead may also be known as indirect expenses as theyare not tired to a specific job. These expenses
Other expense may be known as production expenses or direct expenses because they can be directly tied to actual work done. Examples would be all production equipment including vehicles and expenses to aquire and operate them, labor to do the work and all expenses related to labor including insurances like liability, workmans comp etc whose premiums are tied to payroll and lastly the job materials and subcontractors that are used to perform work.
Keeping records this way makes it easy to calulate your break even point, equipment costs per man hour, overhead costs per man hour, etc. I also pay my guys in production and non production hours such as rain days in the shop, vacation, sick or whatever. Then all you must do to find your labor costs is total your production hours both regular and overtime, then use that number to divide into overhead or equipment costs to get your cost per production man hour. You can also divide into your gross payroll to find the real cost per hour or into the other labor costs such as the insurances, uniforms, help wanted advertising, employer taxes etc to find out your "labor burden per hour".
I recommend you do these things initially because it will make growth easy because there will be no unknowns and the system will be in place.
And buy a stop watch or a Timex with the function so you can keep track of production time for phases of a job. Since labor is always the big unknown you can know yours.
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