The Doctor Did Not Like His Accountant

Last month I met a doctor and as what typically happens I find out who his accountant is. This time he did not tell me but said that he knows more than his accountant. That typically is also a comment I get from doctors. This time when I asked him to be specific, he told me that he is always finding things his accountant left off his return. When I told him it is very important to have a good accountant since they can do a lot more than taxes, he seemed surprised and puzzled. Here is some of what I told him.

• Getting your tax return prepared is very important but using it to plan for the current and later years might be even more important. The tax form is a record of what you did last year. Planning is something that can be used to alter your situation going forward to take full advantage of the tax laws. This can also be done many times without actually making any substantial changes in your activities. A good tax planner can add many dollars to your pocket.
• You seem to be the younger member of the practice you work in. At some point, you might be acquiring some ownership. A good accountant can assist in structuring the buy-in and payment terms and possibly the amount and even with some of the negotiations. If you will need some upfront cash for a down payment, the accountant could introduce you to a banker that could provide a term loan. Likewise, if you want to buy a practice.
• If you decide you would rather work in a hospital setting, a good accountant could help you negotiate your contract and a possible bonus arrangement. This could be especially beneficial if you have a specialty that could draw grants to the hospital.
• Most young people with families usually should have life insurance. Your accountant could help you determine the amount of insurance and its form and length, how it should be owned and to provide for the proceeds if you pass away prematurely or for guardians in the unfortunate event of both parents being killed.
• College funding for children is also on the minds of young parents. Your accountant could also advise you on what can be done and possibly when this should start.
• You will be wealthy someday and could be even wealthier with the right financial planning or wealth management guidance and this will also include suggestions of tax-deferred ways of investing. The right accountants also do this and can likely do a very effective job since they will have accumulated a database of knowledge about you including your feelings about risk, financial security, personal values and your goals.
• In the terrible situation of a marital separation, your accountant could assist in asset division and child support and possible alimony payments.
• Buying a house is a major undertaking and a good accountant could work out cash flow and the benefits or detriments of a large mortgage and possibly the type of mortgage that would be best for you. Similar services could be provided if you want to buy a vacation house or rental property.
• If you are not as yet married the accountant could offer suggestions on how to handle your joint finances, review your assets and suggest the advisability of a prenuptial agreement as well as an evaluation of each party’s debts including any school loans.

There are many more things good accountants do and most become their clients’ trusted advisors in all their financial, and even some nonfinancial, endeavors. Clients typically call their accountants before they engage in any new major undertaking.

Clients of good accountants are usually thrilled with the relationship and value it because of the accountant’s care and proven benefits and value over the course of time.

If you have any tax, business, financial, leadership or management issues you want to discuss please do not hesitate to contact me at [email protected].