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Accounting is one of the first things most business owners hire out.

The tax code is so complex — and the penalties for messing up so severe — that it just makes sense to bring on an expert, right?

Well this might surprise you, but for the last 8 years, I did all my bookkeeping, taxes, and accounting myself. Even as I sit here advocating delegation in most other areas of your business, this was one role I held on to.

Why?

The reasons boiled down to a bad experience with a local CPA a few years ago, and my own cheapness.

A bad experience years ago

After moving to California and setting up shop here, I interviewed a few local accounting firms and settled the one that made the best impression.

However, once we started working together, the owner and I didn’t really see eye to eye on what the scope of the relationship should entail. I was looking for a consultative partner who would more than pay for themselves by giving me strategic tax advice.

And really, that’s what I’m looking for in any hire. It’s supposed to be an investment, not a straight cost.

But this CPA was really more of an order taker and just filled the numbers I supplied her into the appropriate forms. For this service, she charged a healthy upfront retainer and $200 an hour.

After the second year of this, I could see which numbers were going into which boxes, and since she wasn’t offering any sort of strategic guidance, I cut ties and started doing it all myself.

The DIY years

It just didn’t seem like I was getting enough value relative to what I was paying her. Was this how all accountants operated? Are there any who operate on a “performance basis”, taking a percentage of the tax savings they uncover instead of a flat hourly fee?

Parting ways with my local CPA coincided with a downturn in the business, so the cost savings were important to the bottom line as well. Why spend the money if I still have to do 80% of the work?

For years, I filed all my returns myself. I did the corporate returns by hand and our personal returns with Turbo Tax. I haven’t been audited to find out, but in the back of my mind, there was always this question of whether or not I was doing everything right.

Every tax season, it would usually take a full weekend day (sometimes more) to complete the returns, and perhaps a half day for the business stuff. This is one area where TurboTax shines; they store all your information from previous years so if things are similar year-to-year, you can get it done pretty quickly.

But where TurboTax struggles is they try and make it too dummy proof. Sometimes I don’t know the “right” answer to their questions. Should I account for something this way or that way? Which way is best?

So between the time spent, the anxiety, and the business looking up again, I started to keep my eyes and ears open for some help.

Do I need a bookkeeper?

One role I’ve never really considered hiring for is bookkeeping. And the reason is I actually really like doing it.

Maintaining my spreadsheets and keeping track of all the income and expenses as they happen is oddly satisfying for me. And on top of that, I can see daily how my month, quarter, and year are shaping up in terms of profitability.

But I knew I could use some help on the tax planning side. By simply following the form inputs my first CPA did 8 years ago, was I leaving money on the table or paying more than I needed to?

Finding a new accountant

I actually connected with my new accountant through a podcasting friend of mine. Every month he’d share a different tax tip or strategy on my friend’s site.

Because he was focused on giving value upfront, he’d built up a lot of trust in my mind before we even spoke. And it helped that he was familiar with online businesses like mine, a concept I’m not sure my old CPA ever fully grasped.

When I finally reached out to explore the possibility of working together, we had a free 30-minute consultation. He said a couple things during that free call that ended up saving me thousands of dollars, so it became a no-brainer to hire him after that.

It turned out my years of stubborn do-it-yourselfing had cost me quite a bit in the name of not spending money on professional help. The trouble is how do you know if someone will really help you!

In this case it was easier to see because this CPA was well-versed in the online marketing world and had done a great job of providing actionable tips for free. I reasoned, if this the advice he’s giving away online, what will he come up with when he really digs into the numbers?

And as a bonus, he charged quite a bit less for the corporate and personal returns than my local CPA did years ago.

Your Turn

Did you do your taxes yourself?

If you’ve worked with accountants in the past, what did you like or dislike about the experience?

2 Comments

  1. I have had some “ehhh” experiences with accountants thus far….I often wind up suggesting tax strategies that are subsequently implemented. I would love to hear more about your person !

  2. I’ve done my own two years in a row now, for a similar reason.
    I didn’t feel that the CPA I used was really interested in helping me. My tax liability was WAY higher than I thought it should have been as a sole-prop/sole breadwinner/chief bottle washer.
    Thanks for the little reminder to get out and start looking for a CPA partner. I filed an extension this year because who’s got the time?

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