Using QuickBooks Saves Time & Money
We are still receiving resistance to our push to have all of our clients use QuickBooks. I received this email today from a long-time client, who I thought had been in the process of getting his stuff set up on QB:

Kerry/Sherry,

Is there any way we can get our taxes done for 2003 without doing Quick Books? Thanks,

My reply:

For individual income tax returns (1040), we can prepare your tax returns without QuickBooks if you thoroughly fill in every applicable portion of the organizer.

If you ever take the big tax saving step of setting up a corporation, QuickBooks must be used, with no exception.

To dispel a common misconception, the use of QuickBooks is not being encouraged for our benefit. It is the best move to ensure that you receive all of the tax benefits to which you are entitled.

When assembling their tax info, most people simply look through their main checkbook for deductible items. They miss a lot of other kinds of deductible activity, including cash, credit cards, loans and other investment and bank accounts. Keeping track of all of those items and properly combining them for tax purposes can't be done any easier or more efficiently than with QuickBooks.

If you are comfortable using the shoe-box approach to assembling the info for your tax return organizer, and don't mind missing out on possibly thousands of dollars of additional tax deductions, that's fine with me. It's your money.

Kerry

I know I've said these things many times before; but it still gets my goat that people think I am pushing the use of QuickBooks for my own sick pleasure of making them do something new and unfamiliar; when it is really to help them save large amounts of taxes.
 
What I forgot to mention in this letter was the fact that having all of your data in QuickBooks also makes it much readier in case of an IRS audit.  I have been spending the past few months working on multi-year IRS audits for two different clients, and there has been a huge difference in the amount of time it has taken me and the volume of physical paper documents required for the auditors. 
 
The client whose info was on QuickBooks only required a few envelopes of substantiating documents because the auditor was able to rely a lot on the QuickBooks reports.  For the other client, who hasn't been using QuickBooks, we already have six file boxes filled with documents, and may need even more for the auditor.  I explained to the client that if the info for those years had been in QuickBooks, the audit process would have taken a fraction of the time it has. 


- posted by Kerry M. Kerstetter, MBA~CPA~ATP~ATA @ 7/16/2004 01:44:00 PM Send this post: