5 mistakes tax and accounting pros make and how to avoid them

Recently, I found myself reflecting back with a friend on my 25-year career in accounting, and we got to talking about how much the profession has changed, the successes we’ve had, and, of course, the mistakes we’ve made along the way.

I remember heading to my first engagement way back in the ’90s with my boss (also my Mom), and feeling excited and somewhat terrified. How would I know what to do, and what if I made a mistake? Would that be the end of my career? There are so many rules, regulations, processes, and technologies to learn and stay on top of.

I’d like to share the top five mistakes I made in my own career early on to help others avoid making them in their own professional lives.

Mistake #1: When Heather met SALY

I met SALY while working on one of my first business tax return engagements. I was diligently ticking and tying balances, and reviewing the current year amounts to the prior year balances. While reviewing the prior year work papers, I kept seeing SALY written next to fixed asset amounts, where we usually wrote in our work paper references. I had no idea who SALY was – as far as I knew, we didn’t have a “SALY” working in the firm, so I asked my tax manager about her. After his laughter subsided, he explained that SALY meant, “Same As Last Year.”

We all know that consistency is king to accountants. We are trained to be consistent in our methods, and use our keen eyes to look for outliers and anomalies, but SALY thinking can actually work against you as an accountant. Here’s an example:

What if that client had thousands of dollars of fully depreciated assets on the books that had never been written off because no one in the firm had ever asked whether these assets were still around? They’re fully depreciated and don’t really affect the financials, so why not just leave them there? The thing is, property tax can be assessed on assets even if they have no book value. In some cases, towns continue to assess tax on 20 percent of the purchase price. By asking the client which assets are still on the books and writing off disposals, you may be able to reduce the client’s annual property tax bill by several hundred to thousands of dollars a year.

Sticking to the same old each year may be the easiest and fastest way to get the work done, but how can you uncover changes, or find opportunities for meaningful discussions with your clients, that can help them grow and evolve as a business if you are doing the same thing, the same way, every year? We have to ditch the SALY thinking, and create firm processes and procedures to bring a fresh perspective to engagements year after year.

My advice: Don’t rush, be creative, ask questions, and stay on top of new methods and technology. Use a client organizer that asks questions about changes, and insist that your clients complete it. If they are having trouble, complete it with them. If you are in a larger firm, have different staff work on the client every other year to make sure a fresh set of eyes is on it, and discuss opportunities for the client as a team.

Mistake #2: ASS-U-ME

As accounting professionals, we should NEVER make assumptions. Never. Ever. We can make guesses and guesstimates, but we must confirm these with our clients.

It’s easy to fall into the “assume” trap. You know your client and you know their habits, right? Wrong. Without verification, you don’t really know the story, and it’s not your job to make up an answer. In fact, you could get yourself in a boatload of trouble by doing that.

Early in my career, this was one I really struggled with. I really wanted to finish the engagement, but the client either wouldn’t respond, or a partner decided the amount was immaterial. Big mistakes can happen this way. Back in my younger days, I was reviewing a client’s books and came across an expense in December that the client had coded to the “ask my accountant” account and typed “truck” in the memo. The client had a truck, so I assumed that the expense was an auto repair and quickly reclassified it to the automobile expense account.

Fast forward to the following year. I started to see other expenses related to the purchase of a truck, such as registration fees and loan payments. After finally asking the client, I learned that the $500 repair was actually a deposit on a new truck that was secured with a note payable. The client should have been eligible for a Sec. 179 deduction on the truck in the prior year that was missed because of the assumption I made. That was a really difficult lesson to learn, and changed the way I approached future engagements.

If a client codes something to “ask my accountant,” they are looking for advice about how to categorize the transaction. I should have asked the question, instead of assuming I knew the answer. Communication and verification are key to avoiding the assumption trap.

Mistake #3: If I ask for help, they’ll think I’m incompetent

Every new accountant (and some seasoned ones) makes the mistake of not asking for help from their peers and other firm members, especially those right out of college that are eager to make a good impression to show how savvy and brilliant they are. It’s not only okay to ask for help and say you don’t know how to do something, but it’s also the smartest thing you can do.

I can’t tell you how many times that I’ve seen a staff member sit on an engagement for weeks because they were trying to figure out a problem and felt that asking for help was a sign of weakness. Most of the time, a colleague or someone in your firm has encountered a similar challenge before and can help you figure it out. Asking questions and accepting help from others not only helps you learn, but also helps cultivate meaningful interactions and relationships!

You can also leverage social media for help. There are lots of great groups on Facebook for accountants to freely share their experience and expertise! Check out The Workflow Watering Hole, QB Community LIVE, USA Bookkeeping Community, or Business Workflow and Management on Facebook, just to name a few.

Mistake #4: But, I’m shy

The larger our network and community are, the more knowledge and support we have in our skill arsenal to help our clients. As an introvert, I struggled early on to actively network with other accountants and bookkeeping professionals. The good news is that I find LOTS of accountants are introverted and feel just like I do.

Connecting with peers virtually, or IRL (in real life), on a regular basis will keep you aware of new opportunities, ideas, and changes in technology. If you belong, but are not active in your professional organization, consider attending a networking event at least once a month. When you’re ready, lean in to become involved. This will provide you with mentorship and other professional opportunities to both give back and receive.

Mistake #5: What if I break it?

As a consultant who focuses primarily on accounting technology, lots of professionals turn to me for guidance on selecting and implementing technology in their firms. Many of us have been afraid to step into the world of apps and technology because we are afraid of breaking something, or creating a giant mess of things!

About 10 years ago, after attending a seminar where a colleague showed some mad Excel skills, I made a plan to set aside time each week to “tinker” and learn about new technologies and how they worked.

To safely tinker, I purchased a subscription of QuickBooks® and started trials of other applications, so that I can safely test my own skills and try new things without messing up a live data file. It’s super fun, actually!

Consider purchasing a QuickBooks subscription to use for testing, and set aside an hour per week to explore new methods and new technology. This will allow you to become more confident when implementing new technology, and it will help you understand how the apps and technology that we use should interact with each other. This small step can help you become an app master!

If you want to learn more about apps, check out The QB ‘Appy Hour with Liz and Heather bi-weekly webinar series, where we highlight a different app each episode and share our tips and tricks about implementing new technology.

Keep your chin up and carry on!

We all make mistakes. The important thing is to own them, fix them, and learn ways to avoid them in the future. I hope by sharing my top five mistakes, you can avoid the same missteps in your own career. Give yourself room to explore, question, tinker, and break stuff – and if you ever want to share your own messes over a cup of joe, shoot me an email!

Editor’s note: This article was originally published on Firm of the Future.