Personally, I’m not a believer in taking on unnecessary expenses. In our consumerist culture, we constantly find companies and people promoting products and services to us that we don’t really need for the sole purpose of making a profit. I personally get frustrated when I see so many ads, and I could tell this isn’t something I need, but rather just someone coming up with a reason to make money. I do not see having an accountant or CPA as something you don’t need. In fact, I will make the argument that having an accountant can be an expense that can save you much more in the long run, and help you better reach your personal and business financial goals.
Accounting is about Accountability
The word accountant is derived from the word accountability. In essence, one way of thinking about an accountant is as an accountability partner. Let’s be honest. Finance plays a major role in our lives. How we live, where we live, and the things we are able to do or not do. Furthermore, as you move along your financial journey, your financial life can get quite complex. You may have started or acquired a business. You may have investments such as rental properties, stocks and/or bonds. You may be employing a small team. As a result, it becomes all the more important to have a good financial accountability partner that can help you to stay on track towards reaching your financial goals.
Greed vs Financial Goals
Now let’s make a distinction between greed and financial goals. Greed, as defined by the dictionary is a selfish and excessive desire for more of something than is needed. Greed wants more of something than any one individual may need. We’ve been taught that the love of money is the root of all evil, and thus, we often tend to thinking negatively when it comes to finances. Greed is a condition of the heart, where we now love money and money becomes the main thing in our lives. A goal on the other hand is an aim, an outcome, a result, or achievement towards which your efforts are directed. Therefore, having a financial goal doesn’t necessarily make you a greedy person. It just means there are financial outcomes you want for yourself and/or your family. Accounting is the practice of helping to hold ourselves accountable towards those outcomes we say we want — financial independence, being debt-free, a house, or even owning a business. Without a system in place to accurately track our progress, many of our goals tend to be just wishful thinking. “It’ll be nice if I was debt-free, or had a house, or owned a business”. Regardless of where we are starting from, accounting can measure our efforts, track our progress, provide strategies and alternatives that can help make these goals a reality.
What Would a Good Accountant Do?
So what would a good accountant do for you? Well, a good accountant will not only do your taxes. A good accountant will do accurate bookkeeping, since bookkeeping is the system/process of tracking the financial events of your life. A good accountant will also stay in the know about current events and laws affecting you and the industry you work, as they’ll need to understand how you make your living and the laws that affect you in order to be a good and reliable advisor. A good accountant will check in with you periodically to ensure that progress is being made in the right direction.
Tying It All Together
If you’re like me, there’s always something within that says, “how can I do this myself so I can avoid paying someone else to do this for me”. In summary the concept of accountability implies someone to whom we are accountable to. Without another person to check in with us or to question us or to whom we have to answer to, it gets very easy to come up with our own rules along the way, to justify, make excuses. Having an accountant can be beneficial to you as you have someone to partner with towards reaching your financial goals. You have an advisor, someone to bounce ideas off of when you are considering a transaction, an investment, or even if you need just practical financial advice. You have an expert who understands how to read financial statements, how to analyze companies and provide recommendations on good and bad investments. As the saying goes, “if you want to go fast, travel alone, but if you want to go further, travel together”. Having a personal accountant can be the push you need to travel much further on your financial journey.
Written by Kwaku Anyemedu, CPA
