Sponsor: SofLensÂ® daily disposable
I ask the rhetorical question in the title knowing full well that many eye care practitioners (ECPs) don't use the services of a CPA at all or use one very sparingly.ï¿½ In this age of QuickBooks and other accounting software programs, many ECPs do most of their accounting on their own.ï¿½ I think accounting software is great, but it should be used in conjunction with, not in place of, professional accounting services.
The value of a CPA
Many ECPs think they are saving expenses by not working with an accountant, but the way I see it, they are holding their practice back from the important benefits of a necessary business advisor.ï¿½ An office manager or other trusted employee can certainly perform many routine bookkeeping tasks on a daily basis, but a CPA offers a much higher level of service.ï¿½ I find the professional fees charged by accounting firms to be quite reasonable for the services provided.
Smart CPA firms will work with you to set up QuickBooks or other software programs and work with the reports it provides.ï¿½ The accounting firm will also work with the production reports from your practice management software.ï¿½ The CPA should charge different fee rates for different categories of work; some services like payroll checks and checkbook reconciliation are surprisingly affordable.
Consider these CPA services
- Business review and counseling.ï¿½ At least once per year and perhaps more often, I recommend meeting with a CPA who knows health care practices. ï¿½This meeting should include a review of your current practice financial statement and comparisons to national norms (you may have to supply these ï¿½ see Tip #266 among others) and also with your prior year's data.ï¿½ The meeting may also touch on other issues such as buying new equipment, borrowing funds, the use of a car for business, employee benefit programs, buying or building a new office, how to fire an employee and many more.ï¿½ Your CPA should be a trusted business advisor who will assist you with most of the tough issues you face in the business world.
- Tax planning and filing.ï¿½ The tax code is complex and constantly changing and you need an expert to guide you.ï¿½ Fees paid in this area are a great investment because the CPA will find tax benefits you would have missed and will represent you in an audit or other challenge.ï¿½ Realize that there are many other types of tax besides federal income tax.ï¿½ The CPA can also advise and assist with decisions about your business structure, such as S-corp, C-corp, LLC, partnership or sole proprietorship.
- Payroll service.ï¿½ I find my local CPA does a great job with calculating, printing and depositing employee payroll checks and keeping the payroll records at a lower cost than national payroll firms.ï¿½ I'd rather give the local firm my business and it's helpful to have the data integrated with my other accounting functions.
- Checking account reconciliation.ï¿½ Your practice checking account is an important ledger of income and expenses.ï¿½ The CPA staff can reconcile the account with your bank statement each month and tell you what adjustment to make to the balance.ï¿½ The cost is minimal because the accounting office is so fast and you have better things to do!
- Financial statements.ï¿½ Your CPA can produce a profit and loss statement (also called income statement or P&L), a balance sheet, a statement of retained earnings and a statement of cash flows, but more important is how he or she helps you interpret what it means!ï¿½ An important tool for your P&L statement is to reallocate the expenses, and the CPA can assist with this.ï¿½ What if you took out some things like interest paid and depreciation, and what if you moved some of the personal expenses that run through your books into net income and what if you adjusted things like rent that is not true market value or family members who work for free?ï¿½ What if you assigned appropriate expenses only to the optical side of your practice and analyzed the optical as a separate business?ï¿½ï¿½ Reallocating your expenses may give you a truer picture of your personal income.
- Forensic accounting.ï¿½ This specialty can include an internal audit and help you determine if fraud or embezzlement is occurring in your practice.
- Financial planning.ï¿½ Some accounting firms offer this service to help you plan for retirement and manage your investment portfolio.
- Business valuation.ï¿½ Optometric consultants should also be retained if an evaluation is needed for selling your practice, but CPAs are trained to evaluate business worth using multiple approaches.
- Partnerships.ï¿½ In conjunction with attorneys, CPAs can serve as a valued advisor in developing or restructuring a partnership agreement.
How to find a good CPA
If you don't have a good relationship with a CPA, the best way to find one is by referral from someone you trust.ï¿½ Ask an optometric colleague, other business associates, a banker or an attorney.ï¿½ Most CPAs will be happy to schedule a courtesy meeting to see if you hit it off well and to discuss accounting fees.ï¿½ Find someone you like working with and let him or her help you build your practice.
Best wishes for continued success,
Neil B. Gailmard, OD, MBA, FAAO
Editor, Optometric Management Tip of the Week
A Proud Supporter of
Send questions and comments to firstname.lastname@example.org.
Dr. Gailmard offers consulting services to eye care professionals through Prima Eye Group; information is available at www.primaeyegroup.com.
Please Note: The views expressed in Management Tip of the Week do not necessarily reflect those of the sponsor.
Click to open a printer-friendly version of this tip.
Published by PentaVision LLC Copyright © 2002 - 2016 PentaVision LLC. All Rights Reserved.
If you prefer not to receive e-mail, please use the following link to remove your e-mail address from this list: Unsubscribe
This message was transmitted by PentaVision LLC, 321 Norristown Road, Suite 150, Ambler, PA 19002 | 215-628-6550
Please make sure our e-mail messages don't get marked as spam by adding visioncareprofessionalemail.com to your "approved senders" list. Please do not reply to this e-mail message.