Attention: doctors, dentists, consultants, etc. A professional needs a professional.
When I go to get my car fixed, I am in the hands of the car mechanic.
When I go to get my teeth fixed I am in the hands of a dentist.
I’d like to think both are professionals, that they have my needs at heart when they work and that the work they do is proper complete and precise.
Yet it never fails to amaze me how many people think that accounting rates are something some clients attempt to bargain with me and other CPAs. I have come to believe that accountants who bargain about their rates, are desperate for clients and fail to see the value they provide.
Once we had a doctor client who wanted to bargain our rates. Tell me, when you are a patient going to heart surgery, do you say to the physician “others do this by-pass for $25,000 how come you charge $40,000?” No, you’re willing pay the $40,000 because you want the preferred expert in the field. After all, a mistake is fairly costly, isn’t it?
A client came to us with an income tax audit gone awry. You think maybe as a doctor the client should have sought out a licensed CPA instead of the local cheapest non-licensed bookkeeping firm? Well, she ended up with a non-professional who has little if any audit experience, doesn’t know much about the dental industry and thinks that the IRS auditor’s finding of $150,000 tax liability to the client is ok. The client went straight to a tax attorney who was able to reduce that amount to $94,000. The tax attorney charged $5,000 for that service which in my mind is worth the payment.
When she finally came to me, I sat with the agent, understood the agent’s concerns and figured out the way to reverse the agent’s findings based on writing up the records properly and then tying those records into the dental system the client uses to record patient data.
That’s what it takes to fix this poorly conducted audit. I would estimate my costs to be about $10,000 [and surely no higher than $20,000]. The client will save the $94,000 attributed to her if she decided to accept the engagement with me. But like a lot of doctors, she believes she can do it herself for free. In my mind, there is no chance that will be the case.
And why is it that a client can’t remedy their own income tax audit? Experience.
You see, in accounting, the job is 85% experience and 15% book knowledge. See if your current accountant agrees with this statement.
What makes the mechanic good is that he/she has fixed thousands of other cars before mine; the heart doctor has done many heart operations before the one he is about to do.
And as a certified accountant with more than 25 years experience, I have settled many audits, corrected many auditors work papers, researched the dental industry and know that ‘private pay’ dentists collect a lot of cash, but insurance based dental practices rely almost entirely on insurance company payments. So the IRS auditor’s assumption about a large cash practice in this dentist’s case is wrong. Proving that to the satisfaction of the IRS requires diligent record keeping and a tie to the dentrix program used by the client for her patients.
This is not the first doctor who thought they could learn all they need to know from a textbook or online reading. Sorry that’s not the case for accounting, nor for car mechanics nor for heart surgeons.
Harlan S. Kahn CPA
Paris Accounting Corp
www.parisac.com
There are in effect, NYS and federal unemployment monies transferred for one when collecting a check from NYS. NYS had to borrow money from the fed to afford the unemployment roles back in 2008.
