Minnesota attorney Aaron Hall speaks with Rai M. Kharal of Prudent Accountants, a “strong team of individuals with extensive education and training as Certified Public Accountants, MBAs and IRS Enrolled Agents.”
Prudent Accountants, Inc
Phone: ( 612) 605-3178
Aaron Hall: I’m Aaron Hall
Business owners often feel frustrated with their finances, out of control. They’re very good at what they do in their business, but the money side can cause a lot of problems. What times of problems, challenges, or feelings do business owners typically come to you with?
Rai Kharal: Uh, typically, which is, which happens with every account, that the tax issue that they always feel that they are paying lots of taxes. Those are the common ones. Other ones, they started their business, now they are doing pretty well, and they just want to make sure that they hire the right accountant who takes care of their account so they don’t have to worry about it. They can focus more on their business, not just worrying about their accounts or their tax.
Those are the two typical ones we see.
Aaron Hall: When clients come to you, what is your process for dealing with those issues?
Rai Kharal: Our approach is always, first of all, trying to understand the client frustration, client needs, what exactly is they are going through to understand. So once we understand exactly where the issue is, what the problems they’re going through, then we come back. We analyze a little bit and see, “Okay, where should we start from? Where we could focus more on”
So each individual client has their own specific needs. ______ the best way is understanding their need, instead of telling- we telling them what you should be doing, this and that.
Aaron Hall: Do you ever have a business owner bring in a box full of receipts and say “help!”?
Rai Kharal: That’s very common, and generally, it’s a shoebox. That’s what we get. We do get that, but again, we try to educate them how important it is to be organized, what they do for their business. The more organized they are, it’s gonna be helpful for them to- That’s how we can help them save taxes. In having the right system in place, so they can see their day, monthly-basis, or quarterly, whenever they need to see where the business is going and _____.
Aaron Hall: What are some common ways you help small businesses save on taxes?
Rai Kharal: Generally, initially, you have also noticed that when they set-up their company, they just, all they hear about is LLC. That’s all they hear about, not knowing the, much of understanding of how it is going to impact when they file the tax return. For that side of it, it’s always important to have them understand it’s not just LLC. There are other ways of saving taxes.
There should be considering turning into an S corp where they can save a pretty decent amount of money ’cause they don’t have to pay the self-employment tax on the full profits on all the amounts. I know, I understand they have to run the payroll, but still you can end up saving a pretty decent amount, up to, could be up to $8,000.
Aaron Hall: Wow.
Rai Kharal: Yes.
Aaron Hall: $8,000 savings per year?
Rai Kharal: That’s right.
Aaron Hall: That easily covers the cost of the CPA.
Rai Kharal: Yea, even, even they can do something else too.
Aaron Hall: Right, right. What advice do you have for business owners? In other words, what information would be helpful for business owners to know in this area?
Rai Kharal: My highly recommendation is, just from the beginning, always, having, finding knowledge about the company, who can help them from the initial step to all the way. That’s really important. If they have the right accountant, they can do a lot better.