What happens when a business owner speaks a different language to their accountant?
Something similar to the Tower of Babel happens.
Do you remember this Bible story?
People decided to build a tower so high that they could reach God himself. In order to punish them for their audacity, the Lord decided to teach men in a harsh way. He made all the people speak different languages. They could no longer get along with each other. Accordingly, they could not build the tower.
To this day, the remains of the Tower of Babel serve as an example. To make it clear what happens when people “speak in different languages”.
Can we compare your business to building a tower?
Why not. After all, every entrepreneur wants to rise above the competition.
But what happens when an entrepreneur speaks a different language to his accountant?
If one talks mainly about income and the other only about expenses?
Or one and the other have diametrically opposed concepts about spending financial resources.
Then it’s entirely possible that your business will reach the “Unfinished Tower of Babel” phase.
They say that when God wants to punish someone, he first takes away their mind. Or he sends him a bad accountant.
Accountants adhere to the adage “When water drips from the tap, water fills the barrel”. In other words, they advise the client to limit extravagance. The problem occurs when the business owner unwisely buys a lot of empty barrels, but the water stops. Then it turns out that the empty barrels remain empty, and there is no water, that is, no income.
Hop, one floor of your business tower will not be built.
American billionaire and stock market investor Warren Buffett says: “Accounting is the language of business.”
But if we stay at this intersection between accounting and business, we can quote something else from Mr. Buffett, namely: “Ignorance mixed with greed is the main cause of financial catastrophes.”
An accountant helps you balance income and expenses. Protects you from unreasonable decisions. If you listen to him, of course. But not only when filling out the annual tax return, but throughout the year.
In fact, speaking the same language with your accountant means that he speaks more than you.
Especially in terms of costs, but not only…
If he tells you that the pen with expenses for “working evenings” has grown too much, do not be angry. Consider whether it is better to start offering your partners and customers something alternative. For example, “work walks” on the beach, and not dinner in an expensive restaurant.
Okay, well…we know you’re going to decline this option. But we have to warn you.
Expenses for frequent “business snacks”? Let’s cross out another floor of your business tower.
We know that you have generated this money in your company. We, the accountants, want more of that money left over for you after taxes. This is our goal.
But do you want your luxury resort vacation to be a company expense?
Maybe, but not now…
Aha, you want it to be now? Okay, one more floor of your tower remains unbuilt.
Here’s a case study. A business owner tells his accountant, “The company’s money is mine.”
His accountant replies “No, the company’s money is not yours, it’s the company’s.” Then?
Then we find ourselves in the middle of a typical case of speaking in different languages.
Your accountant tells you that you can’t just transfer company money into your personal account like that.
It says you can’t transfer from the company’s money to your wife’s bank account.
But you do. Get ready to see another floor of your business tower go unbuilt.
Because what your accountant tells you is that you owe 10% profit tax first.
After paying the tax, you can dispose of the profit by distributing it in the form of a dividend.
But!!! For this you owe the revenue agency another 5% tax.
If you speak the same language as your accountant, filling out your annual tax return won’t feel like the dreaded Judgment Day.
You’ll just know that your financial affairs are in order.
And at the end of the year you two can meet somewhere. Why not on a “work walk”. This will save you money and your accountant should be happy.
And if he is cold, you will tell him that the business lunch is an expense that the accountant does not recommend to be made.
If we are sure of something, it is that in the accounting office “Correct Account Consult” we speak the same language with our clients.
The language of accounting.
The language of facts. On income and expenses. The tax breaks. And financial discipline.
We are always willing to teach our customers this language.