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Why You Need to Find the Right Tax Advisor
Are you struggling to find the right tax
advisor? You’ve worked with different accounting and tax advisors, you’ve
outsourced this task to bring it back in-house again after being let down by
different tax professionals and agencies and now you feel disappointed,
disillusioned and clueless where to start looking for the ‘perfect’ fit.
If you’ve been in business for a few years, you
know this is one of the most common problems small business owners face. If
you’re just starting out, fasten your seat belt and make sure you take some notes.
Not so long ago I wrote an article about the importance of having written contracts in place. Today I’d like to focus on another major hurdle for a lot of small business owners: accounting and taxes. More specifically, it’s about finding the right tax advisor.
You see, working with the wrong tax advisor
will not only cost you tons of money and energy but on top of everything, it
can lead to long-term damages that are directly correlated with negatively
affecting your reputation and brand.
On the other hand, you can have the world’s
best tax advisor on your team but if that person goes into the financial
playing game as an individual, not as a team AKA isn’t willing to work
hand-in-hand with your legal counsel (attorney) and the other players on the
team, you won’t succeed.
Remember, business is a team sports. Indeed,
putting together an amazing team is challenging but you need to strive for it,
if you’re playing to win.
Common Mistakes When Hiring a Tax Advisor and
How to Avoid Them
Honestly, I could write an entire book about
mistakes I made when hiring and working with accounting and tax advisors.
During my corporate career I had the
opportunity to work with one of the ‘Big Four’ accounting companies. Big 4
refers to the four largest accounting and auditing firms in the world. These
are Deloitte, PricewaterhouseCoopers (PwC), Ernst & Young (EY) and KPMG.
These guys know the ins and outs of the game as they created the loops and
holes in the system. This is one of the major reasons why corporations and enterprises
prefer to work almost exclusively with one or more of the Big 4.
Therefore, if you have the necessary cash, you
might want to pick one of the above-mentioned accounting firms from the
beginning and avoid all the trouble that comes from working with smaller and
less sophisticated entities.
Below is a small sample of mistakes you might
encounter along with some practical advice from the trenches:
1. MISTAKES: Tax advisor doesn’t
understand your business; he/she applies single rules or a small set of rules
instead of the entire tax law to reduce your taxes; he/she cares more about
his/her paycheck than yours; hiring tax professionals who aren’t willing to
teach you the tax rules.
PRACTICAL ADVICE: Clarify priorities. Make sure he/she knows your specific situation and is fully
educated and committed to saving you the most taxes in accordance with the tax
law. This implies that your tax advisor invests time into getting to know and
understand your business while using creative strategies in applying the entire
law, not just a single rule of law in your favor.
2. MISTAKES: Hiring tax professionals
based on a handshake; hiring without proper understanding of how tax advisors
will charge you for their services; hiring based on recommendations without
doing your own due diligence.
PRACTICAL ADVICE: Only written contracts. Do yourself a huge favor and forget trust and verbal agreements
when it comes to taxes. Only operate based on legally binding contracts to
avoid damaging consequences for you and your company’s reputation. Get a
written offer before you proceed. You don’t want any surprises at the end of
the term when your tax advisor sends the bill to you for delivering his/her
services.
3. MISTAKES: Not knowing and understanding
your numbers; assuming that your tax professionals know what you want; lack of
proper communication.
PRACTICAL ADVICE: Don’t assume. Know
your numbers so that you can reverse-engineer them. Go through the numbers.
Verify all documents you receive from your tax advisor. Communicate your goals
and priorities very clearly. Keep your eyes on the ball. Build and maintain
your competitive edge.
Choose Your Tax Advisor Very Carefully
Let’s get one thing straight: you’re the only
one who can reduce your taxes.
You.
Your tax advisor can teach you the rules and
how the tax law applies, but ultimately, you’re the one in charge.
The right tax advisor will help you navigate
the waters and reduce your chances of being audited, and therefore it’s crucial
to hire the tax and accounting player that is a perfect fit for your team.
The next time you hire a tax advisor, prepare yourself to ask the
hard questions. Don’t wing it. Your company and reputation are at stake. Choose
wisely to avoid the pain and headaches of damaged relationships.
The post Why You Need to Find the Right Tax Advisor appeared first on StrengthInBusiness.
View all episodes
By Krisz Rokk
5
33 ratings
Are you struggling to find the right tax
advisor? You’ve worked with different accounting and tax advisors, you’ve
outsourced this task to bring it back in-house again after being let down by
different tax professionals and agencies and now you feel disappointed,
disillusioned and clueless where to start looking for the ‘perfect’ fit.
If you’ve been in business for a few years, you
know this is one of the most common problems small business owners face. If
you’re just starting out, fasten your seat belt and make sure you take some notes.
Not so long ago I wrote an article about the importance of having written contracts in place. Today I’d like to focus on another major hurdle for a lot of small business owners: accounting and taxes. More specifically, it’s about finding the right tax advisor.
You see, working with the wrong tax advisor
will not only cost you tons of money and energy but on top of everything, it
can lead to long-term damages that are directly correlated with negatively
affecting your reputation and brand.
On the other hand, you can have the world’s
best tax advisor on your team but if that person goes into the financial
playing game as an individual, not as a team AKA isn’t willing to work
hand-in-hand with your legal counsel (attorney) and the other players on the
team, you won’t succeed.
Remember, business is a team sports. Indeed,
putting together an amazing team is challenging but you need to strive for it,
if you’re playing to win.
Common Mistakes When Hiring a Tax Advisor and
How to Avoid Them
Honestly, I could write an entire book about
mistakes I made when hiring and working with accounting and tax advisors.
During my corporate career I had the
opportunity to work with one of the ‘Big Four’ accounting companies. Big 4
refers to the four largest accounting and auditing firms in the world. These
are Deloitte, PricewaterhouseCoopers (PwC), Ernst & Young (EY) and KPMG.
These guys know the ins and outs of the game as they created the loops and
holes in the system. This is one of the major reasons why corporations and enterprises
prefer to work almost exclusively with one or more of the Big 4.
Therefore, if you have the necessary cash, you
might want to pick one of the above-mentioned accounting firms from the
beginning and avoid all the trouble that comes from working with smaller and
less sophisticated entities.
Below is a small sample of mistakes you might
encounter along with some practical advice from the trenches:
1. MISTAKES: Tax advisor doesn’t
understand your business; he/she applies single rules or a small set of rules
instead of the entire tax law to reduce your taxes; he/she cares more about
his/her paycheck than yours; hiring tax professionals who aren’t willing to
teach you the tax rules.
PRACTICAL ADVICE: Clarify priorities. Make sure he/she knows your specific situation and is fully
educated and committed to saving you the most taxes in accordance with the tax
law. This implies that your tax advisor invests time into getting to know and
understand your business while using creative strategies in applying the entire
law, not just a single rule of law in your favor.
2. MISTAKES: Hiring tax professionals
based on a handshake; hiring without proper understanding of how tax advisors
will charge you for their services; hiring based on recommendations without
doing your own due diligence.
PRACTICAL ADVICE: Only written contracts. Do yourself a huge favor and forget trust and verbal agreements
when it comes to taxes. Only operate based on legally binding contracts to
avoid damaging consequences for you and your company’s reputation. Get a
written offer before you proceed. You don’t want any surprises at the end of
the term when your tax advisor sends the bill to you for delivering his/her
services.
3. MISTAKES: Not knowing and understanding
your numbers; assuming that your tax professionals know what you want; lack of
proper communication.
PRACTICAL ADVICE: Don’t assume. Know
your numbers so that you can reverse-engineer them. Go through the numbers.
Verify all documents you receive from your tax advisor. Communicate your goals
and priorities very clearly. Keep your eyes on the ball. Build and maintain
your competitive edge.
Choose Your Tax Advisor Very Carefully
Let’s get one thing straight: you’re the only
one who can reduce your taxes.
You.
Your tax advisor can teach you the rules and
how the tax law applies, but ultimately, you’re the one in charge.
The right tax advisor will help you navigate
the waters and reduce your chances of being audited, and therefore it’s crucial
to hire the tax and accounting player that is a perfect fit for your team.
The next time you hire a tax advisor, prepare yourself to ask the
hard questions. Don’t wing it. Your company and reputation are at stake. Choose
wisely to avoid the pain and headaches of damaged relationships.
The post Why You Need to Find the Right Tax Advisor appeared first on StrengthInBusiness.