I hear it all the time: “If I have an accountant, why do I need to know this business stuff?”
It sounds like a reasonable question. After all, we have learned to rely on professionals of all types to have the knowledge and experience to give us good advice and do the tasks we can’t – or don’t have the time – to do. But having business advisors doesn’t mean you get to shut your brain off or avoid the responsibilities of your writing business. Why your business advisors can’t help you all the time, with everything:
- They don’t know everything. That wonderful accountant you rely on might not have the latest tax information. Your attorney might have missed that class in law school and is too lazy to look it up. Your web person might be good at designing web sites but poor at SEO.
- They might not be honest. Sad, but true. How do you know if your accountant is embezzling money from you if you don’t know enough about keeping your business books to review what’s been done? I’m not saying you need to understand all the intricacies of the tax code, but you do need information, enough to read and learn some of the basics.
- They are human. They make mistakes. For example, an attorney once filed the wrong corporate form for my husband’s business, costing him a good deal of money. Sure, we can sue for malpractice, but that costs more money. You need to know enough to ask questions and maybe get a second opinion.
- They might not be available. In a business emergency, you might not be able to contact your accountant or your attorney. You might be in a transition between one accounting service and another. Your web service might go bankrupt. Who knows? We can’t count on anyone being around, so knowing what to do – and knowing where to get the basics – is still important.
- You may not be able to pay for an advisor. There are times in business when we just don’t have the money to pay others. The one person I would pay above all others is a good tax preparer. But you may have to do your monthly bookkeeping by yourself. So you want it to be easy and not take up too much time. You certainly don’t want to do your own legal work, and if you get sued, you certainly must pay for an attorney. But there are some legal filings you can do yourself, like registering a business name or filing a business with your state. I can help you with sorting out these tasks, and making them easier.
The bottom line: Relying on someone else to help you in your business is great. Do what you can do, and hire out the rest. But, you are still responsible for the success of your business. You must sign on the bottom line on your tax return. You are the one who will get audited by the IRS. Not your CPA. You need to know enough to take care of your own business.
Not all of it, not the details certainly. But you need to know enough to know (a) when you need help, (b) when someone isn’t being honest (see #2 above), and (c) to do it yourself if you have to. There are times when we don’t have the money to pay someone to do it for us.
One of my business mantras is “Trust but Verify.” To verify, you have to know where to look.