While I was in undergrad at Michigan State University (GO GREEN!), whenever I told someone my major was accounting, about 80% of the time, their response was, “oh, you must be good at math”. Although this was an accurate statement, and I initially presumed the same thing as a freshman; it was my second week in my first accounting class that I realized accounting isn’t about math at all!! Although we are good at numbers, we are also good with people! Long are the days where accounts are socially awkward boring people who wear suspenders and pocket protectors and just do taxes. Our profession is essential to the finances of people as well as the continuity and efficiency of businesses.
Yes, some accountants do taxes, but not all. As a CPA, I am an auditor, accountant, consultant, and tax preparer. My goal is to not only provide tax advice and preparation for individuals; I also want to help improve the processes and efficiencies of businesses, report their financials, and focus on what I love (accounting) while they focus on what they love (their business). People don’t go into business to focus on accounting, but accounting is a major piece of every business. Most people have a love/hate relationship with accounting. Why spend time on doing something you hate, don’t understand, or don’t have time for when you can outsource it someone who loves doing accounting and that’s why they want to help?!
So I want to share some of my top 5 myths about who accountants are and what we do for individuals and businesses!
Pam’s Top 5 Myths about Accounting/Accountants:
1. Accounting is about math – Like I mentioned before, this could not be further from the truth but this the myth I hear the most! Yes, I love math and yes, accountants use math…but so does an engineer, salesman, marketing person, lawn man, hair stylist, etc. If you want to get paid, you will have to calculate the amount you are owed, the change if paid in cash, your commission percentage, etc. Accountants use math similarly. The core of true accounting is research and storytelling. Accounting is like a puzzle; when you look at the numbers, you are looking for holes and patterns that fit together properly. You have to use those numbers to tell the owner of a business, shareholder, bank, or manager what they mean, how they can use them, and what to expect in the future. Also, accountants are excellent at risk management, process improvement, and creating efficiencies and controls in the workplace. This is more of a consultative role which I enjoy most, and there are very few numbers involved.
2. Accountants are introverted or boring and really don’t like working with people - Even a tax accountant (another myth mentioned above…we don’t all do taxes!) has to be a people-person. Regardless what kind of work we do, all accountants have to work with clients, employees, vendors, client’s customers, etc. We build trusted relationship with our clients not only based on our knowledge, but also our personality! I love this field because of the people interaction and relationship building.
3. I pay business expenses out of my own pocket. It’s really no big deal. - WRONG. If you own or operate a business…you should treat it like a business and not a shopping day at the mall. You need to note when you have paid an expenses out of your own pocket towards your business. This is money that could be returned to you tax-free.
4. Small businesses don’t need accounting or it can just wait until it becomes too much for me to handle myself. - I do believe that non-accountants have the ability to do create their own budget, forecasts, financial statements, and research trends in their industry. However, if you really don’t have to generate monthly reports or read through the tax codes to learn the greatest tax advantages for your business, then you shouldn’t have to. Also, at the end of the year when tax time comes, it’s easier for an accountant who looks at your financials on a regular basis to prepare you return versus coming in with a shoe box (or trash bag) of receipts. The latter method will cost you more as you have to pay for the tax preparer’s time to learn your business and sort through receipts. And without that trusted relationship, they may not take the time to be sure they have every nickel and dime that can use to lower your tax liability.
Your accountant will be following your financials the entire year and everything should be neat and clean come time to file your taxes. Also, your accountant should be able to give you monthly financials that tell you where you can improve in an area, have reports ready for possible loans, help you make financial decisions, help you make the most of recent tax advantages, and tell you if your business will trend towards lower or higher revenue in certain months based on history. This is all needed information to help grow your business.
5. I can handle my accounting myself. I have QuickBooks. – Quickbooks is a great program that many people, including myself use, on a daily basis. Although it’s simple to learn, it still takes someone who has the time and a little bit of accounting knowledge to use the software at its maximum capacity. As a matter of fact, most open QuickBooks only to become overwhelmed and confused. Having this program is very good and can become an awesome tool; but your accountant should help you set it up, educate you on how you can and should use it, and come in periodically to be sure everything is in order, run reports, and fix problem areas. You can be wonderful in business but unless you know how to operate the accounting side of your business perfectly, you should really do yourself a favor and at least get advice from an accountant on this process.
Of course there are myths about every profession that are endless. However, these are the ones I hear the most and I just wanted to bust the myths and show the benefits that accountants really have. Accountants, CPAs in particular (how I got that designation is worthy of its own separate post…) play a vital role in helping businesses make better use of their resources and increasing efficiencies and profitability. With careful planning and help from an accountant, you can learn how to start, manage, and successfully grow your business. Accountants are trained to look at businesses with an objective eye. They can help you identify weaknesses in your organization and offer suggestions for improvements. A CPA/accountant can be your most valuable business partner!
Additionally, accountants can help individuals become tax advantageous, prepare and save in their taxes, create and maintain budgets and meet their financial goals.
If you have any questions or are inspired and feel like you need an accountant now, feel free to contact me. I love meeting new people, building new relationships, and improving and growing businesses!
These myths are exactly how I feel and were also inspired by an article I’ve read while doing research: “Top 10 Accounting Myths – Busted!” by Mindy Viteri.