WARNING: Manage your bookkeeping guys!!!

Discussion in 'Lawn Mowing' started by JimLewis, Feb 10, 2005.

  1. JimLewis

    JimLewis LawnSite Fanatic
    Posts: 6,842

    I wanted to post this because I know that most of my friends who own small businesses (lawn care or other contractors) are usually not so great at bookkeeping. I relate. Hey, if we were all had great accounting skills we probably wouldn't be mowing lawns! But that doesn't mean we shouldn't learn. It's been a long process for me and I am still learning. But I am brutally reminded today of just HOW important this is.

    We are going through a tax audit for year 2001. The good news is that I had half-way decent records in 2001. Thank God I didn't get audited for an earlier year, where my bookkeeping was seriously lacking. But the bad news is that in 2001, my bookkeeping wasn't quite good enough. I made some mistakes in record keeping and in filing taxes (In my infinite wisdom, I thought I would just go ahead and file our $300,000 tax return all on my own using Turbo Tax). Well, some of these mistakes are what CAUSED the audit. Certain expenses didn't get recorded in the right area, certain expenses were taken the wrong way, and actually, as a result of the audit, I have found several thousand dollars of receipts that I DIDN'T claim. All of this was stupid stuff that a CPA would have caught.

    Fortunately, so far, the audit is going well. The auditor I am working with is fair and is working with me on some creative ways to fix my mistakes. But I am lucky. Not all auditors are this nice.

    If you haven't already done so; Get with a very good CPA. Get with a good bookkeeper. And learn Quickbooks (or whatever you use) in and out. Learn how to do everything the right way. And don't file your own taxes, no matter how smart you think you are. That's my advice.....
     
  2. Mark McC

    Mark McC LawnSite Bronze Member
    Posts: 1,565

    Some tax filing companies, such as H&R Block, will cover any taxes in excess of what they say you owe, but that assumes you report all income.
     
  3. PMLAWN

    PMLAWN LawnSite Gold Member
    Posts: 3,535

    My wife is a CPA and works in finance every day and she will not do our own taxes. A person that works in taxes all the time will be more up to date and much better able to do it right and save you money. And yet we still have to keep up with the day to day stuff and feed the accountant the right info.
    Good Luck with it Jim, and remember keep :D
     
  4. gene gls

    gene gls LawnSite Gold Member
    Posts: 3,213

    Smart advise Jim. I used H+R Block for several years and thought I came out OK as a part time cutter. A friend of mine, who had a part time machine shop business, perswaded me to seek out a CPA. Its like night and day. He pointed out several mistakes on the two years previous returns and was able to recoupe some of the loss. I felt rich the first year my CPA took over.

    Gene
     
  5. bart may

    bart may LawnSite Senior Member
    from montana
    Posts: 273

    Great advice. I had a similar situation. You cannot afford not to have a good accountant. I literally threw away thousands my first few years trying to do it on my own. Currently I pay $1,000 to my CPA a year. Sounds like alot but consider the hundreds and thousands usually they save you in finding ways to file your taxes. Once again great advice.
     
  6. Randy Scott

    Randy Scott LawnSite Bronze Member
    Posts: 1,915

    We are signing next week with a full-time CPA (meaning monthly work for us). I'm actually looking forward to this. I think it is going to be good for the business. Like you said, we are not CPA's. Therefore, why would we think that we can do what they do. Our numbers are getting to the point that we need someone to make sure everything gets done properly. Small mistakes now could be costly later. It will be approximately $225 per month with taxes being an additional charge. Seems like you get rid of one payment and find a way to pick up another one.
     

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