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5 Replies Latest reply: Nov 12, 2007 9:46 AM by LUCKIEST RSS

Is an accountant really necessary ?

ChuckRansom Newbie
Currently Being Moderated

Hello forum,

 


I am a new member as well as a new "official" small business owner. For the past 5 years I have been a club promoter for several night clubs in my area. Generally I am paid in cash by the club owners or as a part of my take of the entrance fee of any club I promote. Recently I tried to purchase my first home but was denied not because of my credit score which is good, but because of lack of proof of income. Since then, I have incorporated my business in an effort to have more official record keeping about my income.

 


My question is: Is an accountant really necessary in the beginning? I don't think my needs are complex but I tend to deal in a lot of cash and need help to make my business income seem as legitimate as possible to banks and the IRS. I have a guy who does my yearly taxes but my question is do I need a consultant type of accountant and not just a tax guy? Any thoughts?
  • Re: Is an accountant really necessary ?
    Lighthouse24 Master
    Currently Being Moderated

    Do you NEED an accountant? Not necessarily. Do you WANT one anyway, given your personal financial goals? It sounds like you do.

    I have two acquaintances, both of whom own and operate night clubs, and both have done very well -- beautiful homes, nice families, stable finances, etc. Both, however, had the very same difficulties you are experiencing when they first opened their places, because for every decent and responsible person like them (and hopefully you), there seems to be ten club owners who are not.

    Financial records and statements that are prepared and backed by a CPA will help demonstrate the legitimacy you describe. The passage of time will help you, too (because, as I'm sure you know, "bad" owners open/close/move around a lot, while "good" owners have a history of stability and growth -- and it doesn't take very long to separate the two in your business).
  • Re: Is an accountant really necessary ?
    Ed O'Gee Apprentice
    Currently Being Moderated
    Chuck I think you might have answered your own question. The issue you had with getting a home loan in the first place is because of lack of record keeping for your busy. Like Lighthouse I have had friends in the nightclub business and knowing how busy they were ask yourself do you really have the time to keep your books up?

    Yes you could use quickbooks or any other accounting program to keep decent books, but for someone in your line of business it might be a good idea to see an accountant once a month or once a quarter to keep things straight.
  • Re: Is an accountant really necessary ?
    LUCKIEST Master
    Currently Being Moderated
    You stated that you have incorporated your business. All Corporations MUST file tax returns
    with the Federal Govt (IRS) and your State. Who is going to prepare the tax returns??
    You also stated that you generally am paid in cash by the club owners.
    For IRS purposes that is a NO NO. The IRS wants its share of Social Security and Withholding.
    So if you are comfortable with the guy who does your yearly taxes, then you do NOT need the accountant.
    I feel that anybody in business should have an accountant, a lawyer and an insurance agent.
    LUCKIEST
  • Re: Is an accountant really necessary ?
    LT Lawn Care Newbie
    Currently Being Moderated
    Hey Chuck - welcome to the board. When I first started I had a lot of clients pay me in cash because I did mostly residential lawn care. So just like you it was hard to justify my income. What's more important than anything is to keep a strict record of who you pay and who pays you. If you are paid by clubs owners then they have to have a tax ID, get their tax ID and apply payments to them.

    My suggestion is to start with a program like quickbooks or microsoft money. Keep good records and you'll do fine.
  • Re: Is an accountant really necessary ?
    LUCKIEST Master
    Currently Being Moderated
    Chuck, as LTLawn care said "My suggestion is to start with a program like quickbooks", since I
    do consulting with Qiuckbooks I would be happy to get you started FREE
    Contact me at "pdeig@juno.com" if I can be of help.
    Again LUCKIEST

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