Accounting Archives | Padgett Advisors

What the ERC Pause Means for Small Business Owners

Posted on September 26, 2023 - 2:52 pm by Padgett Advisors

When properly claimed, the Employee Retention Credit (ERC) is a refundable tax credit designed for businesses and tax-exempt organizations that continued to pay their employees while experiencing workforce disruptions due to the COVID-19 pandemic. Unfortunately, the intricate filing process associated with this credit inadvertently created an opportunity for corrupt specialty firms to prey on small business owners, making deceptive claims about eligibility.

With the rise in fraudulent ERC claims, the IRS announced an immediate halt to processing new claims through at least the end of the year. IRS Commissioner Danny Werfel states, “The IRS is increasingly alarmed about honest small business owners being scammed by unscrupulous actors, and we could no longer tolerate growing evidence of questionable claims pouring in.”

Depending on your filing situation, we’re going to cover what to expect and what you should do next as a small business owner.

What if I have already filed an ERC claim?

If you have already filed an ERC claim, the IRS will continue to process your claim, but at a greatly reduced speed. The IRS will be reviewing more than 600,000 claims, so expect processing times to be 180 days (about 6 months) or longer. The IRS may even ask for more information, so be prepared to receive this request.

If you believe that your claim is fraudulent, the IRS is working on offering a withdrawal option for those who have filed an ERC claim but have not yet had it processed. As cited by the IRS, “This option, which can be used by taxpayers whose claim hasn’t yet been paid, will allow the taxpayers, many of them small businesses who were misled by promoters, to avoid possible repayment issues and paying promoters contingency fees.” However, if you have willfully filed a fraudulent claim, withdrawing it does not exempt you from potential criminal investigation.

In the event that your ERC claim has already been processed and you have received an improper ERC payment, you are required to pay it back with possible penalties and interest. Per the IRS, they are “developing new initiatives to help businesses who found themselves victims of aggressive promoters. This includes a settlement program for repayments for those who received an improper ERC payment.” Remember, this program is not finalized, but the IRS plans to release more information in the fall.

What if I am in the process of filing for the ERC?

The IRS encourages anyone being pressured by promoters to apply for the ERC “to immediately pause and review their situation while we (the IRS) look to add new protections and safeguards to stop bad claims from ever coming in.” Commissioner Werfel also states, “Businesses should seek out a trusted tax professional who actually understands the complex ERC rules.”

This would also be a good time to review the IRS list of red flags when it comes to aggressive ERC promoters as well as the IRS ERC eligibility checklist.

What are my next steps?

Considering the complexity of the ERC, it’s never been more important to partner with a trusted tax professional. As small business owners ourselves, we know how scary this situation can be, but you don’t have to face it alone. At Padgett, we prioritize our relationships with our clients and are here to help you every step of the way. With over 50 years of collective experience and expertise in filing ERC claims, we’re prepared to answer any questions you may have regarding your ERC filing status. Connect with us today for reliable guidance and advice.

11 Accounting Mistakes to Avoid as a Small Business Owner

Posted on August 24, 2023 - 7:22 pm by Padgett Advisors

As a small business owner, juggling various responsibilities is a given. From managing day-to-day operations to overseeing marketing strategies, your plate is undoubtedly full. However, amidst all these tasks, one aspect that deserves your undivided attention is accounting. Proper financial management is the cornerstone of a successful business, and avoiding common accounting mistakes can save you from unnecessary headaches down the road. In this article, we’ll explore some of the most prevalent accounting mistakes small business owners make and provide insights on how to avoid them.

1. Mixing Personal and Business Finances

Imagine trying to untangle a ball of yarn that’s woven together with another ball of a different color. This is the visual representation of mixing personal and business finances. While it might seem convenient, it’s a recipe for disaster. Mixing the two can lead to confusion, inaccurate financial records, and even legal issues. To avoid this mistake, open a separate business bank account and use it exclusively for business-related transactions. This separation not only simplifies accounting but also presents a clear picture of your business’s financial health.

2. Lack of Proper Record Keeping

In the digital age, meticulous record keeping has never been easier. Neglecting this crucial aspect can result in missed deductions, errors in financial statements, and, what the IRS stresses the most, significant hurdles during tax time. Dedicate time to organize and maintain accurate financial records. Utilize accounting software to track income and expenses consistently. Not only will this streamline your financial management, but it’ll also offer invaluable insights into your business’s financial performance.

3. Neglecting Expense Tracking

Every penny counts, especially for small businesses. Failing to track all business expenses can lead to missed tax deductions and an incomplete understanding of your company’s financial standing. Create a comprehensive system for recording and categorizing expenses. Keep receipts and bills organized, and regularly reconcile them with your financial records. This practice ensures that no deductible expense goes unnoticed and provides a clear overview of your spending patterns.

4. Ignoring Financial Statements

Financial statements are your business’s financial report card. Ignoring them can lead to poor decision-making due to a lack of insight into your company’s financial performance. Regularly review your income statement, balance sheet, and cash flow statement. These documents provide a snapshot of your revenue, liabilities, and cash movement. Analyzing them helps you make informed decisions, identify areas for improvement, and plan for future growth.

5. Failure to Reconcile Bank Accounts

Unreconciled accounts are like puzzles missing critical pieces. Neglecting to reconcile bank and credit card statements with your financial records can result in discrepancies that are challenging to track down and rectify. Take time each month to reconcile your accounts, ensuring that every transaction aligns accurately. This practice not only minimizes errors but also maintains the accuracy of your financial data.

6. Misclassifying Expenses

Properly categorizing expenses is more than just neat organization; it’s a necessity for accurate financial reporting. Misclassifying expenses can lead to skewed insights into your business’s financial performance and potential missed tax deductions. Familiarize yourself with common expense categories and allocate each expense accurately. This practice ensures that your financial statements reflect your business’s reality.

7. Delayed Invoicing and Collections

Delayed invoicing and poor collections practices can wreak havoc on your cash flow. Ensure that you send out invoices promptly and follow up on overdue payments. Implement clear payment terms and policies to maintain a healthy cash flow. Consistent invoicing and diligent collections efforts help you avoid cash crunches and keep your business operations running smoothly.

8. Tax Deadlines and Compliance

Missing tax deadlines or failing to comply with tax regulations can result in penalties that dent your finances and disrupt your operations. Create a system to track tax deadlines and obligations throughout the year. Set reminders for filing dates and ensure that you’re up to date with any changes in tax laws that may affect your business. You can use Padgett’s tax deadline calendar as a resource.

9. Inadequate Tax Planning

Taxes are a certainty in business, but the amount you pay doesn’t have to be a surprise. Failing to set aside funds for taxes throughout the year can lead to cash flow issues when tax payments are due. Develop a tax planning strategy in consultation with a tax professional. This approach helps you manage your cash flow more effectively and prevents last-minute scrambling to cover tax bills.

10. Cash Flow vs. Profit Misunderstanding

Profitability and cash flow are not synonymous. A business can be profitable on paper but struggle with day-to-day expenses due to poor cash flow management. Understand the distinction between the two and develop strategies to manage both effectively. This ensures that your business remains financially stable in the long run.

11. Seeking Professional Help

It’s natural to want to handle everything in your business, but certain tasks, like accounting, benefit from professional expertise. Don’t hesitate to consult with accountants or financial advisors. An accountant’s insights can help you make informed financial decisions, navigate complex tax regulations, and set your business on a path to financial success.

Avoiding these common accounting mistakes is essential for the financial health and longevity of your small business. Additionally, staying on top of tax deadlines, embracing professional advice, and managing cash flow effectively will contribute to your business’s resilience and growth. Remember, proper accounting isn’t just about numbers—it’s about making informed decisions that drive your business forward. Reach out to your local Padgett office to partner with a trusted advisor today.

Financial KPIs, EBITDA, Gross Profit, and 12 other financial terms you should know

Posted on June 7, 2023 - 4:42 pm by Padgett Advisors

Financial literacy: “the knowledge and skills that give you the ability to manage your finances, including budgeting and investing”

Financial literacy is the key to successful money management and the reduction of financial stress. Yet many people struggle with financial literacy, to the point that the National Financial Educators Council (NFEC) estimates that financial illiteracy cost the U.S. population more than $352 billion in 2021 alone.

Below, we have a defined a few key financial terms to improve your financial literacy and support your money management abilities:

Financial KPIs: Financial key performance indicators are quantifiable metrics that help measure a business’s performance in terms of things like revenue, expenses, profits or other financial targets.
EBITDA: Earnings Before Interest, Taxes, Depreciation and Amortization. It is a metric used to evaluate a business’s profitability and a common starting point in determining a company’s value. It is calculated using this formula: EBITDA = Net Income + Taxes + Interest Expense + Depreciation & Amortization.
Gross Profit Margin: A metric often used to analyze a business’s financial wellbeing by calculating the amount of money made from product sales after cost of goods is subtracted,
Net Income: The amount of profit left after subtracting other costs (selling, administrative and other general expenses) from the gross profit margin.
Accounts Receivable (AR): The amount of money owed to a business for good or services delivered that hasn’t been paid yet by the customer.
Accounts Payable (AP): The amount of money that a business owes to its creditors or suppliers.
Return on Capital: A payment (also known as a return) received from an investment that is not considered taxable income or capital gain.
Capital Gains: Income that results when an asset is sold for more than you originally paid for it.
Capital Loss: The opposite of capital gain; A possible tax deduction resulting from an asset being sold for less than its cost or book value.
IRA: Individual Retirement Account, which may be one of the several types. Traditional IRAs are typically funded with pre-tax dollars while Roth IRAs are often funded with after-tax money.
Defined Contribution (DC) Plans: A type of retirement plan (such as a 401k) in which employees contribute a set amount of their wages to the account, usually pre-tax.
APR: Annual Percentage Rate; refers to the amount of interest on a loan or investment, not including compounding interest.
APY: Annual Percentage Yield; refers to the amount of interest on a loan or investment, including compounding interest.
Articles of Incorporation: A set of documents filed with the government to legally create a corporation, such as a C-corp or S-corp.
Articles of Organization: Similar to Articles of Incorporation, these are a set of government documents files to create a limited liability company (LLC).

If you want to continue improving your financial literacy or are worried about your finances, Padgett’s nationwide network of CPAs and EAs can help. Our advisors can work with you to understand your personal or business finances and can help you make financial decisions with confidence. Find an office near you today!

Carden of Tuscon aces the test with Padgett

Posted on December 1, 2022 - 7:12 pm by Padgett Advisors

Bette Jeppson’s business-ownership story began at home in 1973, when the oldest of her three children was ready to begin education, leading her to open her first Carden School in Colorado. After serving five years as director of the school, Mrs. Jeppson’s story moved to Tucson, Arizona. “People kept asking me when we would open a school on this side of town,” she said. “So, we did.”

Carden of Tucson opened in 1980, teaching approximately 40 students in rented facilities. “When we first started, we were a private school, and it was difficult to keep all the finances going,” Mrs. Jeppson said. “We had to collect tuition, and I was never one for turning down children when their parents couldn’t pay. In 2000, we became a charter school, and then we just needed to keep our enrollment up.”

Today, 42 years after opening, the school serves over 130 students from kindergarten to 8th grade. As an alum of the school, Katy Martinez now works with Mrs. Jeppson as the Office Manager for the school, helping manage the business side of the school along with teaching several classes.

“We’re a very small facility, so many of us wear a lot of hats,” Katy said. “I teach 6th grade and 8th grade math, and then I come back into the office and take care of behind-the-scenes stuff like our HR, QuickBooks, and assisting teachers and administration with things they may need.”

As the Office Manager, Katy works closely with Carden’s accounting partners, Linda Parent and Michale Haubert of Padgett Tucson. “Linda and Michale have been really good at teaching us how to do things. They oversee what I’m doing and help show me what to do. They’ve taught me a lot!”

Although Padgett Tucson has become a valuable partner for Carden, unfortunate circumstances prompted the school to reach out to Linda originally.

“We had a business manager who embezzled funds back in 2010,” Katy said. “When we were going through that process, one of our board members was familiar with the original accounting firm where Linda worked. They helped with an audit of our books. After Linda left that firm, we contacted her again and followed her to Michale and Padgett Tucson.”

The embezzlement was a nightmare at the time, but Mrs. Jeppson believes that it ultimately strengthened their business. “We found people like Linda to help us with the finances and get straightened out and on a better path moving forward,” she said. “That was the good thing that came out of the embezzlement—we learned a lot.”

Now, having worked with Linda and Padgett Tucson for almost a decade, the Carden School is acing their yearly audits.

“Our account is so intricate with it being a school, and it’s so different from a typical business,” Katy explained. “When I started 15 years ago, I knew absolutely nothing except answering the phone and filing a few papers here and there. Now, I learn something new every year. We have to do a yearly school audit, and I really appreciate that Linda and Michale are willing to show us the answers and guide us. They touch base regularly and are always willing to take our calls. Their communication is key.”

Although Mrs. Jeppson is retiring as director, she’s confident that she’s leaving the business in good hands. “It’s been very valuable to have Katy and Linda. I’m just learning to step aside and let the young ones take over! We do really appreciate Linda and her office and all the support they have given us through the years. To other business owners, I’d say find your support system and keep them!”

How to build a strong chart of accounts

Posted on October 6, 2022 - 9:07 am by Padgett Advisors

Right now, your accounts are full of data that can help you understand the overall performance of your business. You probably know that, but do you feel like you’re taking advantage of those insights? If understanding your day-to-day expenses and income and calculating your profit feels hard to navigate, it likely means you need to work on building your chart of accounts.

A chart of accounts is defined as an organizational tool that includes a full, categorized listing of all accounts in your ledger, such as income, expenses, assets, liabilities and equity. This chart of accounts, or COA, provides crucial information about your business, but understandably, many owners aren’t sure how to set up this method of categorization. What should your categories be, how do you define them, and where do you keep track? We spoke to Karen Randolla, EA and owner of Padgett Westchester to learn her four key tips for building a strong chart of accounts for your business:

Use a template.

There are several “standard” COA templates available online, including templates from Xero and QuickBooks, as well as Padgett’s own standard COA, available to clients. Using a standard template can help you make sure you’re including the most important categories and not leaving any key areas out. If you’re using a similar COA to other businesses in your industry, it also becomes easier to set benchmarks and compare your business to competitors.

When using a template, you’re likely to still need to make some edits to adjust for how your business runs. “For example, most standard templates include an area for postage costs,” Karen says. “If you run an e-commerce business or need to ship things regularly, this would be a relevant cost for you to track. But for many businesses, especially restaurants or those in the service industry, sending mail is not a common day-to-day occurrence. If that’s the case, you could list the occasional postage expense under a category like ‘office expenses’ rather than keeping it separate.”

Avoid the “miscellaneous” category.

While there are occasional expenses that just don’t fit anywhere else, the miscellaneous category is very easy to overuse in your COA. “Don’t let it become a financial junk drawer!” Karen warns. “It’s worth taking the time to sort things out and determine what categories your income and expenses really belong in.” Having everything neatly sorted will make it easier to track your budget and cash flow and help you identify specific areas that may be causing an issue.

Don’t overcategorize.

As tempting as it can be to lump everything together in miscellaneous, it can also be tempting to make your categories too specific. “If you run a restaurant, you may have categories for food and beverages,” Karen says. “You could break down that food category even further, and sort by appetizers, entrees and desserts. When tracking income, this could be useful in determining what your best-selling products are, but it can cause complications when trying to track expenses.”

For example, if an appetizer and an entrée both use the same ingredient, where do you categorize that cost? When setting categories, remember that you’ll need to track both incoming and outgoing funds to have meaningful measurements. If your income and expenses don’t line up well, something may need to be adjusted.

Consider other documents and filings.

When tracking your funds, don’t forget about other places those numbers may show up. Payroll is a good example. Whether it’s for your employees or it’s the funds you take out to pay yourself as owner, that will also show up on forms like a W-2 and a tax return. For funds that show up on multiple documents like this, it’s crucial that these numbers match to your COA.

Remember that at the end of the day, your chart of accounts is meant as a tool to help you run your business better. Whether you need help managing your accounting or want to learn about other ways to strengthen your business, Padgett’s network of advisors are ready to work with you. Find a location near you today!

Meet Karen Randolla, Enrolled Agent and Owner of Padgett Westchester

As an owner and lead accountant at Padgett Westchester alongside her husband Joe, Karen likes to make peoples’ work easier. She helps small business owners by providing peace of mind, sound advice, and informed problem resolution. Karen is an Enrolled Agent (EA) and has earned an MBA from New York University Stern School of Business. This academic knowledge, and experience in several consulting firms, allows her to assist small businesses as well as business groups within large enterprises, across a broad variety of industries.

Together, Gail Emrick and Padgett Tucson are making a difference

Posted on September 29, 2022 - 7:49 pm by Padgett Advisors

When Gail Emrick became the Executive Director of the Southeast Arizona Health Education Center in 2008, she knew she had a tough act to follow. After the prior director passed away, Gail said, “Her life’s work passed to me. I felt the pressure to take over since she had done so well.”

But after serving more than a decade in the position, and partnering with Padgett Tucson, Gail’s leadership has allowed SEAHEC to celebrate over 35 years of success as an award-winning nonprofit organization serving some of Arizona’s most vulnerable populations. “We work to improve the health of border and migrant communities, both long-time residents and citizens, as well as new arrivals,” she said. “I love what I do.”

SEAHEC focuses its work in three major areas: advocacy, research and action. A key component of their work is service learning, by offering week-long courses for students from universities like Columbia and Mount Sinai. “We get to train our future health workforce through the services they come provide in our communities,” Gail said.

From federal and state grants to frequent audits in the public record, being a non-profit organization means that SEAHEC has somewhat complicated finances to manage. It was crucial for Gail to have a trusted accounting partner.

She explains, “I was looking for an accountant who was knowledgeable in nonprofits and could handle the growth and flexibility of nonprofit accounting.” When they met over eight years ago, Linda Parent was the accountant Gail was looking for. “We have a really trusting relationship, and we’ve been together ever since.”

SEAHEC operates in 6 rural counties in Arizona, and last year, the organization had over a million dollars in grants to manage. “Linda treats my finances like they were hers,” Gail said. “She knows my staff by name. She knows my budget. I have an audit every other year, and every audit I have, I passed with flying colors. I provide quarterly financials to a board of directors as well, and Linda will virtually join our board meetings to answer any questions they have. She’s so accessible. It’s just really impressive.”

As part of the health industry, SEAHEC was financially impacted by the COVID-19 pandemic, bringing in extra funding and many new grants. “About a year and a half ago, I essentially doubled the size of my organization,” Gail said. “Padgett was able to take that on with no difficulty. They treated me the same both before and after I was bringing in a million dollars in grants.”

But for Gail, the perfect accounting partner is about more than accurate financials—it’s about trust and respect. When Gail made a short documentary about the people she works with and why they migrate, Linda, Michale, and the Padgett Tucson office hosted a lunch for them to all gather and watch her documentary together. “I feel like their office really respects the work that we do, and that’s really important to me,” she said.

For other business owners, especially nonprofits, Gail emphasizes the importance of understanding your financials. “For a new business owner or a new director, that relationship with your finance person is just critical,” she said. “I don’t view this as a business; it’s a passion. But the business side of a nonprofit is so important. In the nonprofit world, it’s your responsibility and duty to treat donated funds very respectfully. The best way to get continued funding is to do a good job the first time and treat every community member with the dignity they deserve. It’s really important to choose the right accounting firm, with a solid relationship and someone you can trust.”

Gail’s job is often chaotic with no typical days. But between staying offline when not at work, recharging through fitness, and her relationship with Padgett, she isn’t worried. “I would never leave [Padgett] as long as I’m doing business because I’ve been treated with the utmost respect and as a friend. I sleep well at night knowing they’re managing our money.”

Change Your Mindset To Change Your Business: Part 2

Posted on June 27, 2022 - 4:02 pm by Padgett Advisors

I’ve found that many struggles businesses face come from having the wrong mindset. We can’t move forward when we’re too focused on what we’ve already done. We need to think less about the past and more about the future. We need to think less about efficiency and more about value. And we need to change the way we think about success.

Making data useful

How are you measuring financial success? Are you using standard financial KPIs? Gross profit margin, operating profit margin, net profit margin, working capital, EBITDA, ROI… do you really know what they all mean? Not literally, but what they mean for the business on a day-to-day level? What actions will you take based on those measures?

While these measures are useful, they don’t help you impact the future. We call these financial KPIs “lagging indicators”. This means that they reflect past performance, output that has already occurred. They establish your baseline for future performance, but they don’t help you move the needle on what you do next.

What businesses really need are “leading indicators”, which help guide future results in your business. One important way we can start using more leading indicators is changing the way we view profit.

The definition of profit

Usually, profit is determined by subtracting your expenses from your revenue, giving you a formula that looks like this: Profit = Revenue – Expenses.

But the approach I use comes from the Mentor Plus Level 5 Advisory training that I use with my own clients. The new formula is Profit = People × Process.

Expenses and revenue are just results of choices you’ve already made or actions you’ve already taken. They’re the effect, not the cause. Your people and your process are the cause. The processes you follow and the people who are taking actions in those processes are what gives you the lagging indicators of expenses and revenue. To measure profit proactively, looking at leading indicators, we need to look at your people and the processes they apply to produce results.

A business is a series of inputs and activities that result in a product and profit. Consider tax return preparation, for example. As accountants and tax professionals, we take inputs from clients in the form of their financial information. We have our staff use that information and perform activities to produce a completed, filed tax return. That’s our product, and where we get our profit.

This applies to other businesses, too. As a chef in a restaurant, you take inputs in the form of your ingredients and tools, perform the activities of preparing and cooking the meal, which is your product. You likely also have service and dining inputs and activities that affect your end profit. If we only measured that profit in terms of how much we got paid and how much it cost us to make that tax return or that gourmet meal, we’d be missing a lot of information. If you want to change your outcome (revenue, expenses or profit), what you need to look at is the inputs and activities to determine what led to that outcome. In our kitchen example, you would look at the steps that precede meal prep. What processes are applied in the kitchen? Who orders food? How often? Is there waste? How much? What might we count related to those activities?

Efficiency vs. Value

We tend to think increasing efficiency is the best way to increase profits. After a busy season—like tax season, for us accountants—we tend to look at ourselves and try to figure out how we can be more efficient. But sometimes, increasing efficiency just means doing the wrong things faster.

If you have a product that isn’t selling, producing it more efficiently is not going to make it fly off the shelves. Instead, we need to consider value. That product simply isn’t valuable enough to customers and clients.

We need to look at what clients really want and put ourselves in their shoes. It’s all about being client centric. Look at your business from their point of view. For accountants, that means considering how a business owner will use the materials you send them. Is your product really useful, really valuable to the client?

When we say we offer advisory services or business consulting services, what we really mean to say is we’re offering performance measurement. We need to make results visible. People need to know if they’re succeeding or not while they’re doing their work, not after it’s done. That’s what’s useful. That’s what’s valuable. That’s how you change your business: first by changing your mindset and then by working with your clients to identify the kinds of predictive indicators that can help them achieve their desired financial outcomes.

About Geni Whitehouse, CPA, CITP, CSP

A multi-tasking southerner-turned-Californian, Geni helps accountants become Level 5 advisors through The Impactful Advisor, works as a winery consultant at Brotemarkle, Davis & Co, and writes for accounting industry events and publications at Even A Nerd.

A regular keynote presenter at events around the world, Geni is also the co-founder of a remote bookkeeping business at SolveServices and author of How to Make a Boring Subject Interesting: 52 Ways Even a Nerd Can Be Heard.

Change Your Mindset To Change Your Business

Posted on May 24, 2022 - 5:12 pm by PADGETT BUSINESS SERVICES

Traditional accounting services are not meeting the needs of business owners. In fact, when I was talking with a CEO recently, he told me, “I’m going to fire my accountant.”

When I asked why, he said:

“Accountants see in red and black. They do my numbers, and they don’t tell me what to do about my business. They need to stand in my shoes and see what it’s like to worry about cash flow, to have to pay my employees, and to have to figure out what to do tomorrow. I’m staying up at night, trying to make decisions, and my accountant is just telling me if the numbers are red or black. He doesn’t even understand what that number means for me and my business. And that’s what I care about.”

That’s how every business owner feels right now — they’ve never faced as much disruption in their businesses and their lives as they have in the past few years. And it isn’t just COVID-related stress. Lingering challenges include the shift to remote work, hiring and staffing challenges, exponential technology advances, regulatory changes, new digital currencies and stock market fluctuations.

During COVID-19, we accountants had a real opportunity to be a hero for our clients. We embraced uncertainty. We saved companies, kept employees paid and as a result, enabled many families to stay in their homes. So how do we keep the momentum going?

We like stability, safety, repeatability, and checklists. COVID forced us to embrace uncertainty. No one had timely references to read, much less a checklist that told us how PPP benefits would be implemented.

Uncertainty is where businesses are living right now, and that’s where we have the opportunity to help. We want to make a difference for our clients. And that difference doesn’t come from tax and accounting alone; it comes from relationships and advice. That’s where our value is.

Clients don’t just want to know what they did six weeks ago or even yesterday. They want to know what to do tomorrow. They want us to help them plan for the future.

But the problem is that we’ve taught our clients that the people who are good at numbers won’t talk to them, or if we do, it’s in a way that they won’t understand. We trained them to expect us to be poor communicators who speak a foreign language of GAAP and worse, code sections. It’s time to re-educate our current and potential clients about what is possible from us as accountants and to start delivering actionable insights.

We don’t need more data; we need to make that data into something actionable. We need to think less about the past and more about the future. We need to think less about efficiency and more about value. We need to ask questions. We may be experts in our field, but the clients are the experts in their business, and we need to learn from them just as they can learn from us. We need to hold our clients and ourselves accountable—it’s almost in our name, after all.

When we embrace uncertainty, and truly become partners in our clients’ business success we’re helping owners create the lives of their dreams. As a result, we get to build the lives of OUR dreams. That’s the promise, and it starts with a different way of thinking about the work that we do.

About Geni Whitehouse, CPA, CITP, CSPM

Tommy and Adam Waller find their “why” with support from Padgett

Posted on April 29, 2022 - 5:01 pm by PADGETT BUSINESS SERVICES

For Adam and Tommy Waller, starting a business was not part of the plan. Both brothers work other jobs: Adam is a physical therapist, and Tommy works in national security and in the Marine Corps. But when their mother presented a challenge at dinner one night, The Oyster Bed was born.

“In a family tradition that we have, every time I would ship off overseas in the Marines, we get together as a family with a whole bunch of different seafood and just spend time together before I would ship out,” Tommy said. “And we’ve got a huge family, there’s seven siblings, and we would struggle to keep up trying to shuck oysters. And when you try to grill oysters, it’s not ideal to do on the half-shell. It makes a huge mess and it’s a lot of work. During the last time that we got together for one of these family events, again struggling to keep up, my mom challenged us. She said, ‘you know, there’s seven of you guys, nobody has ever invented anything.’ And so, we figured that we could invent a better system to do it.”

Not long after, the company was created. “My brother called me, I was on my way to head overseas,” Tommy continued. “I was driving to a base in North Carolina, and he called and said ‘Hey, I know what we’re going to call that thing that we talked about inventing. We’ll call it The Oyster Bed.’ So, I pulled over and bought the web domain and created an LLC right there on the side of the interstate, and called him back and said, ‘Hey man, we got a company, we got a website. While I’m gone for a year, start figuring out how to make the product.’ So that’s what he did.”

Three years of research and development later, and Tommy and Adam had created and patented The Oyster Bed: a specially designed metal dish with cooking wells for oysters and a reservoir to collect the liquid, cook larger pieces of meat, or hold garnishes and sauces. They were ready to take their product to the market, but needed investment to launch, so they turned to Kickstarter. “The Kickstarter campaign, really, a lot of it was raising awareness, about the product, and having people understand why—not just what we sell, but why,” Tommy said.

The “why” has always been key to the business for Tommy and Adam after reading about Simon Sinek and the “golden circle” during their years of research. Together, they determined three parts of “why” their business mattered: first, the Waller brothers aimed to bring families around the table and closer to God; second, they wanted to support the environment and reduce coastal erosion; and third, to make good food and “cultivate creative cooking.”

“The second part we derived from our research on the industry and the environment, where we learned that there is significant coastal erosion,” Tommy said. “We’re losing like a football field of land per hour in south Louisiana. What we learned is that oyster reefs can actually help prevent some of that, just because of the nature of these reefs. They break down high energy waves. Oysters are a keystone species, so there’s a lot of other species that depend on them. They’re just really good for the environment.”

“We also learned that the oyster fisherman themselves, when it came time to build new reefs, they didn’t have enough oyster shell to put down at the bottom of the water to create a foundation for new reefs,” he continued. “So that’s the second part of the why; it’s to help restore our coastal estuaries by incentivizing as much oyster shell recycling as we can.”

Tommy and Adam are thankful to have Padgett by their side, not just for practical reasons, but because their Padgett partner, Amanda Aguillard of Padgett Business Services of Louisiana, also believes in their “why.”

“We’ve been really pleased with her as an accounting partner, not just because she and her team are really good at accounting but because they also are just fans of our company and why we do what we do,” Tommy said. “She introduced us to Xero, which is one of the really helpful tools that we use as an e-commerce business for financials and accounting. E-commerce payments for state taxes is a significant challenge, for business owners. We never had to hire full time employees to do our bookkeeping—this company only has three employees, and so it’s me, my brother, and then our incredible social media manager and VP for outreach, Beth. What [Amanda’s] brought to us has been just priceless in terms of being able to maintain a business when it’s not any of our full-time gig and do it successfully.”

“She’s also been a fan of the ‘why’ of the business and has promoted the conservation aspect of what we do even in her own social media channels and those sorts of things,” Tommy added. “It’s not something that’s maybe common among accountants or other business service providers. Usually, you end up hiring somebody to be an accountant or whatever and they just kind of do whatever they do. You don’t usually have a whole lot of overlap with other aspects of the business. Not the case with Amanda, and now with Padgett. It’s a blessing having them looking out for more than just our accounting!”

If you need a financial partner who understands your business and your “why,” Padgett’s nationwide network of CPAs and EAs are here to help. Find an office near you today!

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Posted on April 28, 2022 - 4:38 pm by PADGETT BUSINESS SERVICES