Notes on accounting, tax, and the business of professional services, written from our practice in Corona, CA. Most of the articles below circle the same idea: professional services are worth what they save you, not what they cost per hour.
What We Write About
Three themes run through these articles. The first is licensure, meaning what it takes to earn a credential, what it obligates the holder to do, and why it matters when you are choosing among professional services providers. The second is measurement: financial statements, profitability, and efficiency, and the gap between a business that is busy and a business that is actually making money. The third is value, which is the hardest of the three to write about without sounding self-serving.
Physicians, dentists, nurses, therapists, lawyers, teachers, barbers/beauticians, contractors, public engineers, skilled nursing administrators, optometrists, insurance agents and brokers, real estate agents brokers …
Depending on where you’re at in the life of your business, you may or may not have monthly and quarterly Financial Statements. …
I grew up in the 1960’s working on cars from the 1940’s through the early 1960’s. I’m sure if I had to …
Why Professional Services Are Priced the Way They Are
The article on the strength and value of professional services opens with cars, which is a better analogy than it first sounds. A car built in 1950 could be diagnosed in a driveway with a socket set and a good ear. A car built today cannot, and nobody treats that as a scandal, because the complexity went up and the expertise required went up with it. Tax and accounting moved the same direction. What a licensed professional brings is not the ability to fill in a form, since software does that for free. It is knowing which form, which election, and which deadline applies to your situation, and standing behind the answer when an agency questions it.
Reading the Numbers in Your Own Business
The profitability article makes a simple point. Many small companies produce a tax return once a year and nothing in between, which means decisions get made on the strength of the bank balance. Monthly and quarterly statements change that. They show which lines of work carry the business, where cost is drifting, and whether growth in revenue is turning into anything you keep. That is the connection between professional services and the rest of your operation: the reporting is what makes the strategy possible.
Getting the Most From Professional Services You Already Pay For
Most business owners are already buying professional services — a CPA, an attorney, an insurance broker, maybe a payroll provider — and using perhaps half of what they are entitled to. Asking a question before you sign a lease or hire your first employee is usually far cheaper than untangling the result afterwards.
The second habit worth building is keeping your advisors in the same conversation. When an attorney drafts a trust and no one tells the accountant, the first fiduciary return becomes an archaeology project. When a lender asks for statements the bookkeeper has never been asked to produce, the loan slows down. A single email introducing your advisors to each other is the cheapest coordination you will ever buy.
Third, send documents when they arrive rather than in a batch at year end. A notice, a K-1, a closing statement, a new loan — each one is quick to file away in the moment and slow to chase down in March. Forwarding things as they come in means the time goes into the return rather than into reconstructing the year.
If you want to talk through how to use your professional services more deliberately this year, call 951.399.2675 or stop by our Corona office at 400 Ramona Avenue, Suite 106.
More From Our Practice
If an article raises a question about your own situation, that is worth a conversation rather than a guess. See our accounting and tax services for an overview, or go straight to business accounting and corporate taxes, personal income taxes, trust and fiduciary accounting, or non-profit services. You can read more about Grace and our team, check our helpful links for official IRS and Franchise Tax Board resources, or find our contact information here.
Where these articles reference a form or a deadline, the authoritative sources are the IRS and the California Franchise Tax Board.
