Bookkeeping and tax preparation takes time. Many small business owners and wage earners choose to save money by performing their own bookkeeping duties using software like Quickbooks and/ or preparing their own tax returns using software like Turbo Tax. They truly believe that they are saving money. However, the question that I raise with so many prospective customers is what is the value of your time and how long does it take for you to perform these functions. When we at Fragnoli & Company, CPAs quote our fees we always try to quote a fixed rate fee. When the situation arises that we have to provide an hourly quote, we always stipulate that we are going to perform the duties considerably faster than someone who does not do bookkeeping on a regular basis or is not a professional tax preparer. So the primary questions are: how much time do you spend on your monthly bookkeeping and your tax return preparation? What do you bill for your services to your customers or how much to you make an hour for your work as an employee? What is your time worth to you? In this day and age of trying to balance work and life with so little time for life, people really do need to put a value on their time to determine which tasks they wish to take on and which tasks they need to outsource to professionals.
One of the difficulties in valuing professional services like tax preparation and bookkeeping is that many small businesses and individuals are on very tight budgets and they can perform these duties in a very basic manner. They need to look for numerous ways to reduce expenses and with the solid, and not too complex, software packages in the market like Quickbooks and Turbo Tax, bookkeeping and tax services are frequently the functions that they choose to take in-house. The problem is that there is a lot more to the function than just processing the data. A current advertisement that is running on television by H&R Block does a lot for practitioners like Fragnoli & Company, CPAs. They are probably correct that a billion dollars is being left on the table by people who choose to prepare their own tax returns. We go one step further, you can increase that number significantly by taxpayers who utilize the services of mass production tax offices like H&R Block versus CPAs and Enrolled Agents. Also, just inputting the receipts and expenses into Quickbooks does not necessarily provide a complete set of accounting records. I cannot tell readers how many times we have stepped in and taken over the bookkeeping and tax services for small businesses and individuals and saved them our fees multiple times over. That does not even factor into account the value of the time to the business owner for doing this work him or herself.
The point of this article is to get people to value their time and determine if they are really saving any money by preparing their own tax return and doing their own bookkeeping. I think not. Remember, it doesn’t cost you any fees to discuss services and fees with a professional. At Fragnoli & Company, CPAs, we offer a cup of coffee and a free hour to discuss your service needs. Take us up on it, you might just open up some time for life and save a few bucks in the process.