Concierge CPA October 2018

October 2018

8221 Brecksville Rd, STE 205 Brecksville, OH 44141

(440) 340-1030

Hold on to Your Wheels … Imagine driving home during a frustrating afternoon traffic hour. Tomake your drive more enjoyable, you listen to a thought-provoking podcast. The show is about how wonderful the future will be when technology evolves to a point when all menial tasks are done by robots and self- driving cars take you to your destination. This belief that we have access to a bookkeeping“autopilot”has created a major epidemic of horribly bad financial information among small-business owners. It is hard At Least for Now

enough to understand accurate reports, but when the underlying data is junk, business owners revert back to not even looking at their numbers. Cynics have toldme that I won’t have a job soon because accounting will be done by computers, but in reality, my workload has increased in recent years. It is harder —and of course more expensive— to correct mistakes than to do it correctly in the first place.

Just because self-driving cars are the future, would you just sit back and let go of the steering wheel right now? Would you give up control before some kind of AI is ready to take over?

Unfortunately, there are people who do just that, both literally and figuratively…

First, let me start with the literal example. This happened about 20 years ago in Eastern Europe, at a time when Western technology had just started trickling in. Automatic transmission was a novelty, and, at the time, I didn’t even know cruise control existed. So this guy imported a car from Germany that had cruise control. Due to translation issues, he believed cruise control meant“autopilot,”and of course he wanted to test this great new feature! He turned“autopilot”on, sat back, lit up a cigarette, and wanted to enjoy the ride. You can imagine what happened next …He wasn’t enjoying the results much. Confusing cruise control with autopilot seems like such a silly mistake that surely wouldn’t happen these days, when we are somuchmore informed, right? Unfortunately, it does happen! Not with cars, but with financial and bookkeeping software. Deceptive advertising is partly to blame, but I’ve met people who believe that buying a subscription to an online bookkeeping software and“connecting”some bank accounts to it means that bookkeeping gets done automatically.

Financial statements and various reports do not have intrinsic value. The value comes from the insight the numbers give us. After all, the purpose of accounting is to give us information that can be used tomake better business decisions and find the sources of the problems. Too often I hear,“I’mworking all the time, the entire office is busy, yet when I look at my bank account I don’t see the results.”Well, there could be multiple issues— your pricingmight be wrong, staff could be inefficient, overheadmight be too high, BUT the real problem is that, without having access to accurate and detailed financial information, we are just guessing andwasting time and money on the wrong solutions. Yes, technology made our lives much easier. We don’t have to enter transactions into ledger books by hand, but making sense of the information and using it to make informed decisions is still up to you andme.

One day, perhaps sooner than expected, most of our jobs will be done by some kind of AI. Robots will fulfill our wishes, andwe’ll live happily ever after.

In the meantime, though, if you have questions about how to run your business profitably, or have accounting or tax issues, give us a call at (440) 340-1030.

–Laszlo Szilagyi, CPA

1 (440) 340-1030

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