Author Archives: Darsi Casey

WHAT ELSE SHOULD YOU EXPECT FROM YOUR CPA?

WHY TAX RETURNS ARE NOT ENOUGH

tr

When most people think of CPAs, they probably picture a technician who is very good with numbers. CPAs are often thought of as being left-brained dominant. They are analytical, good with numbers and “just-the-hard-facts” kind of people. Right-brained people are thought of as creative. They are good at language, art, abstract ideas – you know – the softer mushier stuff of life.

But what happens when a client’s needs go well beyond the facts and the data? What happens when a client’s primary need is to trust someone with the most intimate details of their life? This raises a key question. What else, besides analytical abilities and solid tax knowledge, should you expect from your CPA? My answer? A whole lot more. Let me explain.

 

5 Things You Should Expect

At Casey Neilon, we serve primarily entrepreneurs. These business owners care about their tax liability and tax-related issues a great deal. But their needs go well beyond just tax concerns.

This became apparent to me recently. I had agreed to serve as a fiduciary to a client to help manage the details of their estate plan. This meant that I had to ramp up on the value of firearms even though I know very little about them. But they were an important part of the client’s estate and were valuable. Because it mattered to the client, it had to matter to me too.

This experience got me thinking. What in the world do firearms have to do with taxes? The answer, of course, is nothing. But this is a common occurrence for me and my colleagues. To serve our clients well, we have to care about the things that matter to them. We have to make their problems our problems.

After pondering many of my interactions with clients, I’ve come up with a list of 5 things I believe you should expect from your CPA:

  • A relationship of trust
  • Straight-forward counsel
  • Proactive advice
  • Comprehensive services
  • Someone who relieves your worries.

Let me explain why I believe these are important.

 


Key Take-Away

Trust Is At The Heart Of Everything We Do For Our Clients.


 

A Relationship Of Trust

Trust is at the heart of everything I do for my clients. If a client doesn’t trust me or my colleagues enough to tell us why they’ve made certain decisions, it’s very difficult to serve those clients effectively. Why?

Tax codes are often thought of as black and white, as rules with clear lines between the left and right. Oftentimes, that is not the case. Believe it or not, we get to be quite creative in developing solutions for our clients, in many situations. There are so many different strategies and techniques to accomplish a client’s goals. Some of these solutions are tax-related. Other solutions require us to partner with our client’s other trusted advisors, like estate attorneys, insurance specialists and financial advisors.

But to know which strategy is most effective for a client, we have to understand what outcome they are trying to achieve. This usually means we have to spend quite a bit of time getting to know them.

At Casey Neilon, we’ve made it our stated goal to know our clients better than anyone else in their life except a spouse. We know things about our clients that they don’t even tell their children or parents. What sorts of things? We often know:

  • Who is important to our clients (both human and animal)
  • What they fear the most (not always the IRS)
  • Their actual net worth (not always easy with fluid business valuations)
  • Their hopes for the future
  • Why they started their business in the first place and what they want to see happen with that business in the future
  • When they plan to retire (some never do)
  • Which family relationships are vital and which are troubled
  • Who they trust (and who they don’t trust)
  • Why they work so hard and take so many risks

We’ve designed our interactions with clients to get to know them deeply. This means we spend a lot of time listening. We ask a lot of questions. We are intentional in trying to see the world as our clients see it.

Much of this time we spend getting to know clients has absolutely nothing to do with numbers, with data or with taxes. But when the time comes for us to use our analytical skills, we already know what a client wants. This means we not only help them faster, we also do better work for them. Our deep knowledge of our clients helps us serve them more effectively. They get better outcomes because we’re good listeners.

Do you have that kind of relationship with your CPA?

 

Straight-Forward Counsel

Here is the straight scoop.  Sometimes I have to disagree with my clients and tell them that I don’t support what they want to do.  In some instances, they want to do things that the tax code or regulations explicitly do not allow.

In other instances, especially with business owners, my role is to provide a reality check.  This is important in instances such as when a merger or acquisition is being entertained and my client has to negotiate a value related to their business.  Succession plans, liquidity events and business transfers are far more complex than many business owners understand.

The challenge is that company owners oftentimes are not objective about the value of their businesses, usually because of how much sweat equity they have put into these enterprises.  My job is to ensure that the expectation of value is realistic so we can proceed based in hard numbers, not hopes.

It’s not just a business exit strategy that requires a realistic expectation of value.  Access to financing, interest rates and terms with suppliers all depend on the financial health and history of a business.  My clients benefit from objective advice that is straight-forward, even when they do not want to hear it.

Do you have a relationship with your CPA that is based on straight-forward counsel?

 

Proactive Advice

The big complaint against the accounting industry is that CPAs are not proactive.  This is especially true if a CPA firm is driven by the tax calendar.  I’ve written another article about this topic and about how difficult it is for CPA firms to be available during the tax season.

But I don’t want to avoid the issue.  I’ll face it head on.  The complaint about proactive advice is legitimate and well-earned by our industry.  I think there are three root causes for this issue:

  • The tax-driven approach to client contact
  • The tax-only or tax-primary service model
  • Expectations from clients that CPAs should know things they don’t know because information has not been shared with them

I believe you should expect proactive advice from your CPA.  But for that to happen, you probably need a CPA who offers year-round services, who has services offerings beyond just taxes and who has a formal process for getting to know you.

Do you get proactive advice from your CPA?

 

Comprehensive Services

Do your needs for advice and support end on April 15, after tax returns have been filed?  Probably not.  A tax-only or tax-primary service model is not enough for our clients.  Why?

Most of our clients are entrepreneurs, which usually means that they have complex financial and personal lives.  The complexities call for service levels well-beyond tax returns.

A successful entrepreneur who has a valuable business or businesses has a great deal on their plate to think about.  We often find that their concerns include:

  • Taxes – personal and business tax planning and returns
  • Financial statements – sometimes they need audited financial statements
  • Investments – retirement plans, real estate and investments in other businesses
  • Estate plans – to ensure their wealth is protected and properly passed on to their beneficiaries
  • Succession – for business exit, lifetime income and legacy impact
  • Insurance – for everything they own and for life
  • Employees – retention, benefits, attraction of new talent
  • Profits – figuring out how to make their businesses more profitable
  • Giving – being charitable in a tax-advantaged way
  • Time – just not enough of it

If you are expecting services from your CPA that go beyond tax returns, but the CPA does not have a model to address these additional areas, you have a built-in mismatch.

Do you get comprehensive services from your CPA?

 

Someone Who Relieves Your Worries

One of the biggest disadvantages of being an entrepreneur is what this does to your personal life.  Most of our clients work too many hours, take on huge risks and sweat the details of their businesses.  Stress management and finding ways to be healthy are crucial for entrepreneurs.

I want you to picture in your mind, for just a moment, an ideal weekend.   Does this include you poring over financial statements, responding to IRS demands, filling out forms or building financial models?  I’ll bet it doesn’t.

Most of our clients want to spend their non-working hours with loved ones, enjoying the fruits of their labors.  They also want to spend their working hours focused on driving their businesses to the next level, whatever that might mean for them.

I believe a relationship with your CPA should relieve your worries of dealing with taxes, the IRS, many financial concerns and unhappy surprises.  A great relationship with a CPA frees up your mind and energy to focus on work and family and to be totally present in the moment.

Does your CPA relieve your worries?

 

What Are You Looking For In A CPA?

I don’t know what you are looking for in a relationship with a CPA firm.  But I can say with certainty that our clients expect a great deal more than just technical skills and accurate tax returns.

We are committed to delivering services that address a wide range of concerns.  We are also committed to delivering a client experience that relieves worries and produces delight.  If you are looking for more than just tax services, let’s have a conversation.

—————-

Darsi Casey

POSTED BY

Darsi Casey – Managing Partner
With over 25 years of public accounting experience, I have the pleasure of working with a wide range of people, including our clients that range from individuals to large multimillion dollar companies, to our employees that make up our exceptional team, to all the business associates we have the good fortune to do business with.
linkedin

5 REASONS YOU NEED A CLOSE RELATIONSHIP WITH YOUR CPA

AND WHY YOU SHOULDN’T WAIT UNTIL TAX SEASON TO BUILD IT. 

ttls

I’d like to address a common concern I hear when talking to people about CPAs.  While they like their CPA and believe they’re competent, they wish their CPA was more proactive.  Usually what they mean is that they want a CPA who is looking out for them and their business interests.  They either feel that not enough time was spent getting to know their issues or that an issue came up during a conversation or meeting that should have been addressed long ago.  Many tax-related opportunities are time sensitive and if you miss the window, the results can be that you pay more than you needed to.  That stinks.

I’m not going to defend the CPA provider market.  I know that our industry is plagued with follow-through on certain things and with waiting until it’s too late on other things.  We’ve worked really hard on these very issues at Casey Neilon.  I’ll admit that we have a ways to go to serve our clients in the best manner possible.  We are committed to delivering client delight.

Yet, there is an old saying about communication.  It’s a two-way street.  In this article, I’d like to explain why you shouldn’t wait until tax season to build a close relationship with your CPA.  I’ll also put forward some ideas to help you improve communication and build a better relationship with your CPA.  I’d also like to make some suggestions about how to do this year-round, rather than primarily during tax season.

Why you shouldn’t wait until tax season

Tax season is really busy for CPA firms.  We all know this, right?  But, the point is worth emphasizing because I think things like this that are common knowledge get taken for granted.  Let me illustrate my point.

During tax season, it would be nearly impossible for a medium-sized CPA firm to meet with every single client for one hour or more.  If you do the math, you’ll see what I mean.

Let’s assume that a CPA firm has 1,000 clients.  If they each needed one hour for an appointment, that’s 1,000 hours of meeting time.  Let’s assume that each meeting required at least one hour of prep time for the CPA staff to be ready for the meeting.  That’s a total of 2,000 hours.

Let’s assume that same CPA firm has 20 staff who meet with clients.  Let’s assume they can meet with clients or do prep work for 8 hours a day.  That’s a total of 160 work-hours for a single day.  It sounds like a lot, but it’s really not all that much.

For a CPA firm with 20 full-time staff to meet with clients or prepare for meetings during tax season, it would take more than twelve 160-hour work-days to complete those meetings.  I can assure you that no CPA firm can spare 12 days during tax season.  Why?

During the peak of tax season, basically from February 15 through April 15, our time is spent analyzing documents, preparing returns, following up on details related to important issues and asking our clients clarifying questions.  We do not have a leisurely pace of business during those months.

So while we would love nothing more than to meet with all of our clients in tax season, it’s simply not practical.  If we did that, we would almost certainly miss important deadlines and details.  Our clients would be very upset with us.  This is the difficult reality that we face.

You could say – hey that’s your problem – and you’d be right.  It is our problem.  But it’s also our clients’ challenge too.  The better we know a client’s situation, the better we can serve them both during tax season and year-round.  You benefit from being deeply known by us.

This is why you should actively seek to build a close relationship with your CPA when it’s not tax season.  For several years now, at Casey Neilon, we have tried to set regular meetings with clients, preferring to have quarterly sit-downs at a time that is convenient for them.

We know this is challenging for our entrepreneurial clients because they often have very busy schedules.  Other clients are not local to Northern California or Nevada.  So to help address this issue, I’d like to put forward 5 reasons you need this close relationship and then some strategies to help foster it, even if you cannot hold regular in-person meetings.

The 5 reasons you need a close relationship with your CPA

  1. You don’t want to pay more than your fair share in taxes.
  2. Everyone is time-starved.
  3. CPAs are not mind-readers.
  4. Tax strategy, business strategy and personal finance strategy are highly interconnected.
  5. As Ben Franklin said: a stitch in times saves nine.

You don’t want to pay more than your fair share in taxes

This is a top concern for nearly every entrepreneur and for affluent families who have high annual household income.  Taxes are already painful enough.  You certainly don’t want to pay more than is necessary.  This is where a close relationship with your CPA can really help.

Sometimes, when I’m talking to clients, they seem surprised by what I tell them.  In some instances, I share tax strategies that can significantly reduce their liabilities.  They are always pleasantly surprised by this.

But other times, I have to deliver bad news.  While we are known for being creative and resourceful in our advice and tax strategies, there are just some things that we can’t avoid.  This is especially true for entrepreneurs who make financial decisions on a regular basis.

If you have a close relationship with us, we can help you make complex financial decisions within a relatively short period of time.  This can save you a lot of money on your taxes and also produce other attractive outcomes, especially for your business.

Everyone is time starved

Being time starved is a top characteristic for nearly all of our clients.  It’s also true of us.  But if we don’t mutually commit to making the time for conversations and information sharing, you’ll almost certainly miss out on opportunities.

It’s a gut-wrenching moment for me when a client tells me about a decision they made a while back, usually long enough back that it’s hard for us to make a difference, for which we could have provided a better option.  Business owners often act with confidence and sometimes with haste.

If you are facing a complex financial decision and think to yourself – I don’t have time to talk to Casey Neilon about this – that is almost certainly a decision you’ll come to regret.

CPAs are not mind-readers

While CPAs can reasonably be accused of not being proactive, it’s equally true that we are not mind-readers.  A client recently made some financial decisions and then notified us after they had taken action.  It seemed that they expected us to straighten out a difficult situation that they had created.

When we asked them why they had made those choices, they explained their rationale.  We outlined several other options that they might have considered that could have avoided consequences during tax time.

The client seemed mystified.  “Why didn’t you tell me about these back then,” the client asked?  We said, “because we didn’t know you were planning to make those decisions.”  My point is simply this.  If you don’t tell us about a decision you are considering, there is no way we can help you.

Tax strategy, business strategy and personal finance strategy are highly interconnected

Most of our clients are business owners.  There is a strong connection between their business income, personal income and tax liabilities.  The sad fact is that sometimes increases in business revenues may not result in improved net incomes on the personal side.

This is one major reason you need a close working relationship with your CPA.  Tax strategy is not a one-and-done situation for business owners.  State and federal governments have a number of different tax codes and options, depending on the type of corporate structure for a business.

For instance, let’s assume a business generated an additional $50,000 in EBITDA.  The basic options that a business owner could choose from are:

  • Do nothing and simply leave it as cash reserves in the business.
  • Take it as personal income.
  • Invest it into a 401k or other tax-deferred account.
  • Buy capital equipment for the business.
  • Lease capital equipment for the business.
  • Distribute it as bonuses to valued employees.

All of these decisions have tax implications both for the business and the business owner.  If you have a close relationship with a CPA who knows your business and personal situation intimately, you’ll get the best advices and outcomes.

As Ben Franklin said:  a stitch in time saves nine

You’ve probably heard this statement, sometimes attributed to Ben Franklin.  The meaning of the term is that if a seam is coming undone, a single stitch at the right time can prevent having to make nine stitches later on, after the seam has likely busted.  Here is how I’ve come to think of this.

If a client is considering an important decision and they take a small step of sending us an email or leaving a voicemail, that stitch can save a lot of heartache down the road.  Oftentimes the advice we deliver is pretty straightforward.  It may not take a lot of time for us to help you choose the best path.

But even if a decision requires complex analysis and research on our part, you won’t regret the decision to involve us.  In financial terms, a stitch represents dollars.  If you spend a dollar with us to save nine dollars on your taxes, that is money well-spent indeed.

How to build a better relationship with your CPA:

Now that I’ve established why you need a close relationship with your CPA, let’s talk about how to build this relationship – especially for time-starved people.  Here are some simple strategies you can deploy right away.

  • Record a note when a topic comes up. Don’t wait until later.
  • Use email as a communication and tracking tool.
  • Tell us about something even if you think we don’t need to know about it to do your taxes.
  • Help us build “institutional knowledge” about your situation.
  • Leverage our entire team, not just the senior partners.

Let’s think about recording a note when a topic comes up.  I don’t know about your average day, but my days have a whirlwind of meetings and conversations and ideas floating through my mind.  When I think of something important, I try to record it right then – especially if I know I need to take action on it later.

So if you think of something you want to share with us, let me suggest that you record a note to yourself right away.  Don’t let the moment pass because life will get in the way.  Maybe you can write on a sticky note and put it on your computer.  Maybe you can use a note tool on your iPhone or iPad or tablet.  Some of my clients like to record voice notes and then set a reminder.  Other clients will send themselves an email.

Speaking of email, we like it.  It is a great way for us to track who is in communication with us and who needs to be followed up with.  I check email throughout the day.  I also review email at the start and end of each day.  We also do periodic reviews of emails we’ve been sent to ensure that tasks are getting done.

I also think it’s good to tell us about what’s on your mind, even if you don’t think it will impact your taxes.  I am always amazed when clients are preoccupied with personal matters, like births, marriages, divorces and the passing of loved ones – and they don’t want to talk to us about it.  All of these personal matters, while certainly private to your life, have tax and financial implications.  So please share.

You’ve probably heard the term “institutional knowledge” before.  To us that means “what we know about your family, business, personal finances, goals, dreams and fears.”  We constantly seek to understand our clients better and look at the world from your point of view.  We use a number of software tools to help us do a better job of sharing what we know internally with our various experts.  The more you share with us, the better we get to know you and the better our entire team can serve you.  Of course, we always protect your confidentiality by maintaining strict access to your files.

Speaking of our team, I have one final suggestion for you.  You probably have a close relationship with a senior partner at either our firm or your CPA’s firm.  But at Casey Neilon, we have worked really hard to bring in great talent and give them opportunities to serve our clients.  You may not be aware of just how much talent we have on our team now.

If your schedule doesn’t match up with an available meeting with a senior partner, might we suggest that you schedule some time with one of our staff accountants?  It’s highly likely that they’ve already researched a topic about your situation and may know more about how to help you than you realize.

Final thoughts

It’s really important to us to serve our clients well by knowing their situation intimately.  Everyone benefits when we put the time into building this close relationship.  I hope you’ll find the suggestions I’ve put forward here useful to you and your family for achieving this goal.  If you know of an entrepreneur would could benefit from a close relationship with a firm like ours, we would appreciate it if you would share this article with them.

—————-

Darsi Casey

POSTED BY

Darsi Casey – Managing Partner
With over 25 years of public accounting experience, I have the pleasure of working with a wide range of people, including our clients that range from individuals to large multimillion dollar companies, to our employees that make up our exceptional team, to all the business associates we have the good fortune to do business with.
linkedin