An accountant, bookkeeper and tax attorney walk into a bar. They all order their drinks and start to talk about what they do for a living.
The bartender dries his glasses and poured drinks as he usually would. Always quiet and listening to that chatter amongst the people.
He starts to ask questions, “ How much do you charge for your services?”
By the end of the night, the bartender hires the bookkeeper since he was the cheapest.
Hiring the bookkeeper was the right choice for all the wrong reasons. When purchasing a service, the client’s priority should not be the price of the service. What the bartender should have wanted to know was if his potential hires were qualified. Before he could even determine if any of them were qualified, he needed to know what their services offer.
Like any business owner, you should always know what to expect for your investment.
There are many times in your career where a tax attorney will be essential. You meet with them a few times a year to make sure everything between your business and personal finances are separated and documented correctly.
After learning what a tax attorney offers, the bartender realized he was evading his taxes. The bartender was so wrapped up in his family and running a company that he failed to remember to file his taxes for six years. Now he is committing tax fraud.
The next day he called the attorney and set up his free consultation to become educated on how to run his financials correctly.
Some of the questions the bartender asked the attorney were:
- How long have you been practicing law?
- Have you previously handled a tax situation like mine?
- What’s your assessment of my situation?
- What is working against me and what is working for me?
- Do you charge a flat fee or hourly rate, or do you use some other billing structure?
The attorney responded with a reputation and honest answers. He did not use any sales information or promises to gain the bartenders’ trust. The bartender was then able to go home knowing he chose the right attorney.
Later that night the bartender was playing the conversation he had with the attorney. The attorney was very clear that he needed to hire an accountant and bookkeeper in addition to his services.
Why do I need an accountant and a bookkeeper? Surely it would be cheaper only paying for one service. I can’t afford to pay for all these services.
Well, what the bartender was unaware of was the consequences of documenting his books incorrectly.
An accountant should have at least a bachelor’s degree in some financial background. They are a fountain of valuable information on the ever so complicated U.S. Tax Code. They will be able to offer you tax write-offs to generate more profit instead of just income. They help you file your taxes. They will often adjust your books records to make sure you are complying with all tax regulations.
Some questions the bartender asked his accountant before hiring:
- How can you help me prepare for tax season?
- How often do you want me to stay in touch with you?
- What are some financial decisions that I should consult with you first about?
- How can you help me grow my business?
- How can you help me work on my cash flow?
The bartender went home fully educated on his next financial steps. He had helped to get his books cleaned up from the last six years. As soon as he walked out of that office, he knew his next phone call was to a bookkeeper.
The third level of your finances should be taken care of by a bookkeeper. They are the ones who will be able to document all of your finances correctly to make sure the other two levels can do their jobs efficiently. Bookkeepers usually do not have the extensive education as an attorney or accountant. Bookkeepers these days are traditionally freelancers and own their own business.
You may be wondering why you should trust a freelancer with your books when you can do it yourself. Bookkeepers often go to school to become an accountant or attorney. They are either in school or continuously staying up to date on the industry.
The bartender spends so much time managing his team and tries to stay up to date in his industry. He chose to hire the bookkeeper.
Question the bartender asked:
- What is your scope of work?
- This is where they will explain the breakdown of their services. And what is to expect from their services.
- What is your level of education and experience?
- How familiar are you with my industry?
- How often should I expect communication with you?
- Am I hiring you personally or your company?
- Will someone else be working on my books?
- How do you protect your clients?
With knowledgeable and poetic responses the bartender felt confident in his decisions of hiring all three.
After six months his accountant called him.
“ We are calling to let you know that we have found multiple forms tax fraud and money laundering in your books” The accountant stated.
Shaking with fear the bartender stated, “I do not understand, I thought it was your job to make sure this does not happen…”
The accounted went on to explain, “My job is to assess and make adjustments. Your bookkeeper was the one who documented the tax fraud and money laundering.”
The account went on to ask questions on how the bartender met this bookkeeper. After understanding the situation, the accountant went on to ask, “The bookkeeper claimed to know what he was doing without any proof of his reputation. Did you run a background check to verify his credentials?”
That is when the bartender realized there was a problem. He went back to ask the bookkeeper for a background check. Of course, the bookkeeper was long gone.
Several reasons prompt a background check. The most common, however, is when security clearance necessitates for the position you are applying. Specific jobs like those which involve financial responsibilities or accounting require your credit reports to show how dependable you are.
This may sound familiar, but do other companies require security clearances and you do not? You need to bring value into your work and require a background check with sensitive job positions.
A bartender hiring a bookkeeper is a prime example of someone who should have requested a background check.
What is a background check?
Background checks are merely reviews of your criminal, commercial, and at times financial records. They are a standard requirement currently in the job market. Specific surveys suggest that at least 70% of all employers require their employees to go through a background check.
The standards set by The Fair Credit Reporting Act, states that background checks are consumer reports. No employee is authorized to do background checks on an applicant without first consulting the candidate. Before running a credit check or even getting any consumer reports then they ( the employers) should have asked you.
But, this is a very tiresome and unnecessary process, the bartender expressed.
However, the truth is that it saves you from a lot of unforeseen circumstances.
With surveys estimating that 40% of resumes contain tweaked or even completely false information, background checks are used by employers to determine if you are telling the truth. The checks make sure that the employers are getting what you promise in your resume.
The checks are used to determine different things about you.
- Did you graduate from college as you said you did?
- Did you work at the place you said you were working at previously?
In case anything in the reports lead to a conclusion of fabrication of any information on your papers, it dramatically affects your credibility. Yet, not all information gotten from the check can be used to discriminate against you. If at any point you feel that the employers wrongly used the information to influence their decision not to hire you. You have an option of contacting the Equal Employment Opportunity Commission (EEOC).
Nation origin, race, sex, genetic information, disability, religion, age are some of the information that should not be used by employers to make decisions on hiring.
Employers should perform background checks on both male and female employees equally. For example, it is so wrong to check the criminal records of male employees and exempt the female employees from the same check.
Most employers conduct background checks on employees during the hiring phase before a candidate gets offered a job. There are also situations where background checks get performed on employees after a certain period. For example, maybe after every three years.
There are also employers who go ahead to hire you but with a 90 day probation period. This period is not only used as a probation period, but it is also used to perform background checks. If the result of the background check does not meet their required standards, then they have a legal right to fire you.
What then does a background check entail?
Employment History Verification
This information is based on all the companies you have worked for in the past. Your positions in those companies, the actual dates you worked for those companies and your salary in those places.
It is done majorly to confirm that the employment history on your resume is accurate.
Lately, it has become ubiquitous for employers to run a credit check on the employees they are considering for a raise and also on the ones getting employed.
Drug and alcohol testing
There are various types of tests that employers may decide to take on their employees. Often times hiring is contingent upon a candidate passing the drug tests and screenings before employment.
Information on criminal records varies depending on the state a person resides. There are states where criminal records can only be checked up to a particular time in the past. There are also states where criminal records can get checked for specific positions.
In conclusion, background checks are essential for employers because It helps keep everyone in the company safe. No one is supposed to work with people who have questionable past. For the safety of everyone at the workplaces, it is vital that every employer embraces background checks.