Who Do You Trust When It Comes to Your Money? | USTaxAid

Diane Kennedy's Blog

Who Do You Trust When It Comes to Your Money?

Written by Diane Kennedy, CPA on November 23, 2018

If you’re like my clients, you focus a lot of your business and investment life on one main thing, making money. That is, you make that your focus if your business is successful.

Sure you build a brand, work on customer fulfillment, try to turn your customers into raving fans and do all the hundred other things that make your business a success. But the bottom line is the bottom line. If there is no profit, there is no business. At least there isn’t one for long.

If you’re successful at investing, there is a corollary to that. You watch your ROI. What is your return on investment? If you want to increase passive or portfolio income, there are only two ways to do that: (1) Increase your available funds to invest and/or (2) Increase your ROI.

Now that you’ve got that done, now what? What do you do with the money you make?

That’s when you’ll need to have three types of professionals on your team:

  1. Someone to help you count it, put it in the proper format and analyze it,
  2. Someone to help you grow it, and
  3. Someone to help you conserve it.

Who do you trust to help you with that?

When it comes to (1): Bookkeeping and accounting, there are even subsets of that. Someone needs to do the day-to-day paying the bills and depositing the money. Many beginning business owners do that themselves, but then as their business grows they turn it over to others. Sometimes that is done without systems and that when the problems can start.

Most businesses are embezzled from once. About half of those are embezzled from again. You work hard for that money, don’t let it get stolen by someone you actually pay to help you! (How ironic is that? Someone you trust, that you employ, is the one who steals from you!)

The only way to safeguard your money is with systems. Write them down, teach them and enforce them. The last part is critical. Enforcement.

That’s where good accounting comes into play. If you have timely and accurate financial statements, you (or most likely, your CFO) can spot where there are problems. The financials will show anomalies when you compare expenses to sales. Those type of statements are called common-sized statements. Compare the percentages and you’ll see when things get out of whack. That’s where you concentrate attention. It could mean costs have gone up and you need to adjust your sales price or refine your process. Or it could mean supplies have gone missing.

A CPA or CFO (chief financial officer) can help you with the systems to make sure the sales income is going in your pocket and not someone else’s pocket.

One person can do all of those functions, but most businesses will have a bookkeeper (could be part-time or independent) and a CFO or CPA doing the analysis and helping with systems.

Can you do it all yourself? Yes. But it will slow your business down.

In the case of investments, you need accurate financial statements to calculate ROI.

In the case of (2) getting help to grow your income, you often need at least two types of professionals to help you. A financial advisor can help you with investing paper assets. A CPA or CFO can help you understand where to invest your money in your business. Of course, you will need marketing or advertising specialists as well. The CPA/CFO helps you understand how effective those marketing campaigns are. They’ll help you with the ROI.

And finally, (3) getting help to protect your income. You’re at risk from lawsuits and from excess tax. Finally, we’re down to my favorite things to talk about! Reducing your taxes and protecting your assets. Because, after all, what’s the point of all of this if you just end up giving it all away to the government or someone who decides to sue you?

The first step in putting your advisor team together is identifying who you need. Once you know who you need, your next step is finding them. Not so fast! Now you need to also vette them.

How do you know who you can trust? There are a number of questions we recommend you ask your helpers, in summary they deal with:

Ask about their current clients. Don’t ask names, just get a sense of who they normally deal with. You don’t want to be their biggest client or their “first” of anything if you’re counting on your advisor to lead you into territory that is new to you.

Ask about their personal investments or businesses. If you have a business consultant who has never had a business, that’s not a good sign. The same is true of a CPA who is going to help create tax strategies for your real estate. If they don’t personally own real estate, they aren’t going to be able to advise you based on experience.

Ask about their point of view. If you have or are starting an online business, do they have an online business? If you plan to build a nationwide business, do they have one? If they don’t have the right point of view, you may find you are spending more of your time arguing with your advisors rather than actually getting advice.

Ask about how they work. These days most people work via emails. It’s quicker and more time efficient. If that’s how you work as well, will your advisor work with you that way?

And of course, you’ll want to get a sense of how they are paid. Nobody works for free so expecting free services means you’re getting someone who doesn’t value their abilities. “Free” advice can often be the most expensive advice you’ll ever get.

If you’re interested in a one-on-one consultation with me, please book soon! We’re almost at the end of the year. After that, we might be able to do magic for 2019, but it will be too late to do anything different for 2018.

The fees for consultations will go up December 1, 2019. If you sign up before then, you can lock in the price. Sign up here:

There are two huge tax changes for biz owners & real estate investors. The 20% income deduction is one. And it’s complicated. This is Part 1 of this brand new tax break for small businesses. Learn how to use it as we go through real life strategies you can put in place now!

Leave a Comment


  • Three weekly emails with free tax updates
  • Exclusive deals on products and services
  • FREE Webinar: Covid-19 and Your 2020 Tax Return