A few evenings ago my three-year-old daughter and I set out on a walk. We ended up at the playground and as we were riding on the see-saw, my daughter spotted a discarded object a few yards away.

“Mommy! Someone threw them pants off and left them there! They forgot them! Why would they do that?”

I laughed out loud and told her that when we finished our see-saw ride, we could take a closer look. When we changed our vantage point, my daughter was quickly able to recognize that the jeans she’d spotted from the see-saw weren’t a pair of pants after all. It was a jean jacket!

This interaction reminded me of something I saw happening all too frequently during tax season this year. It seems that many of my clients (and their CPAs) fell victim to the Wrong Vantage Point Syndrome just like my daughter had!

Many of the business owners I started working with this tax season had been using QuickBooks throughout the year as they ran their businesses. But most of them had been relying upon their CPAs and tax preparers to double check their work and ensure the numbers were accurate before using the data to prepare their tax returns.

There are two problems with this. First, QuickBooks and other accounting software programs are great tools. But even great software can lead to disaster when it’s not utilized properly. And secondly, CPAs and tax preparers aren’t usually bookkeepers, and they often aren’t giving your financial data the scrutiny it takes to avoid Wrong Vantage Point Syndrome.

And when their tax preparers fell victim to the Wrong Vantage Point Syndrome, the small business owners were the ones paying the price. When only glancing at the data in QuickBooks, things aren’t always as they first appear. What might look like a pair of pants might actually turn out to be a jacket! Or, to put it in financial terms, what might be recorded as an income is really a deposit you just accidentally entered twice!

One of my new clients had trusted his CPA’s audit of QuickBooks when having his 2006 taxes prepared. Turned out that when his CPA viewed the data from an altitude of 20,000 feet, it led to overstated income of almost $100,000 on the client’s tax return.

That means he overpaid his taxes and overpaid his estimated tax payments throughout all of 2007. That also means he didn’t have access to his hard-earned cash that he could have had in his pocket or in his bank account, helping him to care for his family or grow his business.

This was extra money he had paid that he would not be getting back as a refund because the tax return stated that he’d made an extra $100,000 in profit for the year!

Thankfully we spotted the mistake and the tax return is being amended as I speak. The client hasn’t lost his money. But what would the cost have been if this mistake hadn’t been corrected?

I’m so blessed to have my three-year-old daughter around. Every day her perspectives on the world remind me of different lessons we tend to forget as adults. Tonight, she reminded me that things aren’t always the way they seem to be, it’s always a good idea to take a closer look, and it’s wise to walk with someone who can help you see things for what they really are!

So if you’ve been using accounting software, take some time to really scrutinize the data – making sure deposits, transfers, and other transactions are recorded properly. It’s important to reconcile your bank and credit card registers against the statements provided by the bank and credit card companies. It’s crucial to make sure that after reconciling, uncleared transactions are truly accurate and not duplicates or errors that are better off deleted from the system. That was the critical error made by my client’s CPA and the one we caught for him!

Then at tax time, always look over your tax return before signing and/or filing it. If the numbers don’t look right to you, be sure to speak up and ask about them. It’s your right as a client to ask your tax preparer why the numbers turned out the way they did. If your tax preparer isn’t willing to answer your questions, it’s time to find a new professional!

And if you’re still unsure, and would like an accounting detective to take a look at your data and make sure it all adds up the way it should, I’m always here to help. Sometimes just a slight shift in your perspective is all it takes to avoid Wrong Vantage Point Syndrome.


By Jessica Reagan Salzman