An accountant’s view: What owners do to make their accountants lazy

I’ve reviewed thousands of financial statements over my 40 years as a business consultant. I confess that I have become cynical when it comes to accountants. It seems that accountants fall into three groups: those who simply “account” for any info they receive and offer no advice or guidance, those who work diligently to collect, decipher and ensure that the data is correct, and those who truly engage and interact with their clients to help them run financially efficient companies and guide them to prosperous futures.

I’m writing this while on my No-Compromise Leadership Vermont Bike Tour. I was delighted when long-time fellow speaker Larry Kopsa, a Certified Public Accountant, joined the tour. I’ve known Larry for many years and have always been impressed with his passion to help entrepreneurs understand their financials and achieve their financial dreams. Since Larry is a rare find in the accounting world, I sat down with him after a day’s bike ride for an interview. Our objective was to have an open conversation about how the thinking and behaviors of entrepreneurs can result in inferior service from their accountants.

Here are Larry’s thoughts and insights:

  • You get what you pay for: If you’re looking for a cheap accountant, there are plenty to choose from. They’ll accept whatever information you give them and bang out financial reports and do your tax returns. You’ll get nothing more than “garbage in,  garbage out.” You won’t get advice or guidance. You won’t get someone who will pay attention to your business. If you want an accountant who will adapt to speak in a language you can understand, who will help you create a secure financial future, and who will help you navigate the complex and ever-changing maze of tax laws, then you need to invest in the right accountant and accounting firm. Cheap gets you paperwork. That’s all.
  • The infamous “drop-off-the-shoe-box” syndrome: Too many owners think accountants can read their minds and figure out what all the stuff in the box is. That we can tell if the meal receipt is a 100% deductable expense for your company picnic or a “meals and entertainment” expense that’s only a 50% deduction. “Cheap” accountants will just guess what the expense is. Accountants who work to make and save you money will say, “Let’s sit down together and figure out what all this stuff is.”
  • Not engaging in pre-tax interviews: We meet with our clients once or twice per year to review where the business is and what it plans to do. Engaging in one or more pre-tax interviews is the proper way to build a solid plan for the best year-end tax position. Trying to figure it all out at tax time is just too late.
  • Not paying attention to the work the account is doing: We write all over the financial statements we deliver to our clients. We want owners to look at them and to pay attention to them. We point out areas of concern and applaud numbers that moved in the right direction. We want owners to ask us questions. When owners receive their financial reports and never ask questions, many accountants just assume you don’t care, and that can make an accountant “lazy.”
  • Not paying attention to the “Chart of Accounts”: It’s so easy to bloat a chart of accounts with a ton of account items until it borders on excessive – like having an account just for coffee rather than grouped under “supplies.” Or, having an account for every purchase for each vendor. When we start working with a client, one of the first things we do is clean up their Chart of Accounts so their financial reports make sense and are easier to read.
  • Assuming the accountant truly knows what’s going on in your business: When owners say, “My accountant has that information,” it’s a symptom of a potential problem. We don’t know what’s going on in your business just by looking at your numbers. We don’t know what you’re planning to do. We don’t know when your objectives change. We don’t know what keeps you up at night unless you tell us. That’s why we ask a lot of questions. That’s why we have regular meetings.
  • Not engaging your accountant as a proactive advisor: Tax laws are changing. Generating profit today is more difficult than ever. Your accountant needs to understand your intentions and where you want to take the business. The “past” is for tax purposes. The past is just historical data that helps us identify problems and opportunities. It’s the future that clients and their accountants should be focusing on. We have conversations once a month to not only review financial history, but to develop strategies to improve your cash position and ensure that your numbers are within acceptable benchmarks.
  • It’s OK to say you “don’t know”: We love it when you tell us that you don’t understand something. We encourage it. We want to do our best to make you the most savvy business owner you can be. Again, if you never ask or tell your accountant what you don’t know, you may be the reason your accountant got lazy.

These are just some of the great insights that Larry shared with me. At the end of the interview, Larry surprised me with this offer. “We do a service that we call ‘Second Opinion’ where we review your financials and tax returns. We then offer our opinions on your company’s financial performance and where tax savings could have been realized. We charge $500 for this service.”

Here’s Larry’s offer: He will do a Second Opinion at no cost for the first 20 business owners who contact him. The only condition is that your business must be doing more than $700,000 in annual revenue. Just e-mail Larry at lkopsa@kopsaotte.com and put “Neil’s Monday Morning Wake-Up” in the subject line. To learn more about Larry’s company, Kopsa, Otte & Associates, LLC, go to www.kopsaotte.com.

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Please share your thoughts with me about today’s Monday Morning Wake-Up. Click the Comment button above.

Neil Ducoff, Founder & CEO of Strategies and author of No-Compromise Leadership

Pass this e-mail on to your business colleagues, managers and friends. They’ll appreciate it.


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