Monday, September 3, 2007

Your Accountant, Your Best Friend

I just finished a long meeting with an accountant who has been handling the paperwork and business permits of one of my companies (a small web development firm) for some time now. Today's meeting was a special one. Basically, I have taken a concrete step regarding Kiyosaki's advice of building a team which consists first and foremost a personal accountant/bookkeeper (Choose to be Rich course). This means I have struck a deal with this accountant that she will, from hereon, keep track of all my finances and help me plan my financial future.

Yep, it's a huge step on my part and a big commitment on hers that I'm entrusting her with information not even my closest relatives and friends know about. And so I was frank with her, she is basically my number 2 now, just next to my spouse in terms of the most important people in my life.

I took this step for many reasons but mainly because my personal goal for financial freedom has been set in stone as a result of a couple of months reevaluating my life. And even before reading up on the need for a personal accountant, I saw the cold logic in it. Someone you trust and has the skills is needed to help a person like me track my finances for financial growth.

It's probably overkill for a normal employee no matter how big his salary is to do the same but for me I think it's essential.

Other reasons:

* I have multiple sources of income (which individually are really small) that need to be put in order.
* I keep educating myself on accounting but I know I would always need a real expert and I would never have time to be a professional accountant myself.
* I have big plans but many small deals.
* I don't have enough time and patience to be very detailed with my own finances.
* I can't help being emotional about my finances so I need an outsider to tell me where I really am and what my mistakes are and what to fix financially.

So I got her commitment to help me. For the fees, this was easy, for the meantime my company will shoulder the expense to start which is the normal retainers fee you would expect. But I assured her as she will be aware of my complete financial growth, she would have leverage to increase her fees. And I think this is fair, although we would still in the near future need to be more specific. I'm also thinking of eventually paying for her mobile phone.

Then, we initially set some terms and scope of her work, particularly that I would need a report twice a month.

My accountant was very willing to take on the task and we immediately started by listing down all my income sources and the minimum I get from them per month. After listing those, we listed all my expenses. And then boom! We immediately saw that I was in negative cash flow - about P4000 a month is eating up my savings. That is very valuable information that I will be working on today to find a solution.

Anyway, reasons why I chose her and maybe useful criteria for others who plan to hire their own personal accountant:

* She has worked with me for some time and I trust her.
* She has a pleasing personality which is important because we will likely talk for hours about this boring subject of accounting.
* She is skilled but willing to learn more about other industries I am in.
* She is good with taxes and can help me lower them (legally).

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