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Do You Use and Accountant/CPA?

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Wasn't sure exactly where to put this one, but as we're founding our business (we're establishing ourselves as an LLC in NC) we're trying to determine if there is any merit in paying a CPA to do our books. I ask because we plan to do a significant amount of paperwork on a daily/weekly/monthly basis, and so I'm curious about the value a professional could add.

I'm not all that confident in my own abilities as an accountant for a small business, but would like to know if anyone uses an accountant, what types of qualities or experience did you find valuable in your accountant? Any information on expected rates for this type of work would be helpful as well.

I'll also take any referrals, if there are any to be had.

Many thanks for the input.

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Frankly, I'd cut corners on the lawyer before the accountant. At a minimum, partner with one to get your chart of accounts set up in Quickbooks, and have them check up on your numbers every few months. They'll probably more than make up their cost come tax time by finding deductions, etc anyway.

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Years ago I started my first business and had a "Book Keeper." I found a very experience retired woman that knew the state laws very well and kept me on track of all my filings and payments to the State/Fed. My checkbook was my ledger. I took it to her as needed and it all worked flawless.

While in that business, I heard over and over that I needed a CPA. Someone that could advise me on how to lower the taxes, help me make financial decisions, handle my personal retirement...so I switched. It was an efing disaster. Within the first year I had fines for underpayment and calls like, "Come by tomorrow (April14th) to sign your taxes and bring $14,000 for the feds. What? The day before you give me notice I've underpaid (at your direction) $14,000.

Currently I have an in-house CFO that had no prior financial experience...he's my book keeper! He has taken it on as well as anybody ever could. We found that retired local woman that he goes to about once a month with his questions. Together they keep the payments on time and correct for a ten million a year business. At the end of the year, we deliver our books to a CPA to file our taxes...for several reasons.

One, we have to file in multiple states.

As your business gets bigger there are other reasons to have a CPA's signature on your forms.

1. it lends immediate credence to tax filings and helps prevent an audit.

2. without the CPA's signature on your tax forms, banks will require an independent audit for loans.S

So, I suggest, find that Book Keeper and use them to get the business setup. Then find a CPA that is willing to do your tax filings off your books.

I see Book Keepers as more detail oriented and worried about accuracy.

While most CPA's make more money from correcting their own mistakes, refiling, amending than getting it right the first time.

Today...I still have a checkbook ledger of sorts. Anyone needs a look at my business, that's what I show them. Gross Revenue minus Gross Expenses equals net Profit. Now, want to know what we spent for a particular item? Receivables still out? Give me a minute...

If you drop everything in the lap of a CPA and wait for their calls, you'll get unpleasant surprises. GUARANTEED.

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We need to make a distinction between keeping financial records and keeping "government records" required to account for spirits. I think this thread is doing that, but it is worth a comment.

CPA's - or accountants in general - learn how to classify and report financial transactions. People who audit financial transactions follow a particular set of rules (generally accepted auditing standards or GAAS) to test whether you are keeping your records according to generally accepted accounting principals (GAAP). All of that is accountant talk and, aside from certain universal notions, like internal controls, all of it is absolutely irrelevant to TTB's rules about excise taxes on distilled spirits, bonds, compliance with operating standards, and label claims and designations, etc.. TTB's regulations replace GAAP, which is the CPA's bailiwick, in determining how to classify operations and transactions in DSP records.

An audit firm that does "compliance auditing," which can be described as a review of your adherence to regulatory guidelines, works under a separate set of auditing rules. One of the first principles is that the auditor must have an understanding of the industry and of the rules. Few CPA's have any idea of the rules that apply to DSP operations. While I would never go so far as to say that their advice on TTB compliance is worthless, I guarantee that you do not want to pay them their rates while they are coming up to speed on Parts 19 and 5. So I suggest that you not use a CPA to review those records or prepare those tax returns.

In truth, although the "government records" can seem confusing, in most cases they are simple enough that good old analog systems, operating on the KISS principle, work just fine. You may want to create a few spreadsheets, but if you are not engaged in all manner of transactions, you can develop a set of records that will meet your needs. Then you can hire a bookkeeper, at bookkeeper rates, to keep those records for you if yo do not want to do it yourself.

I will leave it to others, who have business experience on which they can draw, to provide advice about whether you should use a CPA, an accountant, or a bookkeeper to keep your financial records. I will offer one bit of advice, in any case you should keep an active hand in both financial and government recording and reporting. Ultimately, the problem is going to be yours, when someone says show up tomorrow to sign, and oh, yea, bring a check for $14,000 or, sorry buddy, but you can't call the spirits in that bottle bourbon.

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You don't need a CPA to do the daily transactions.

If you don't know QuickBooks enough to do it yourself, you can likely find a bookkeeper to do a few hours per week on your books. There are many people that make a business out of doing multiple local businesses. They just spend 2-3 hours per week with each client. That is often enough for a small business that does a few hundred thousand dollars in sales per year.

You have a CPA do your tax return once per year.

A bookkeeper can do everything else at a fraction of the hourly cost.

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  • 4 weeks later...
  • 3 months later...

We have some good accountants in our Pennsylvania Guild....

I'm outside Philadelphia, I run www.craftdistillinginsurance.com and I work with the majority of the distilleries and breweries in PA and NJ.

Read my Interview with IndAgent Mag!


Kyle Rheiner




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