Ch-ch-changes

In this episode of Building Infinite Red, Jamon, Ken, and Todd touch on the exciting world of lawyers, accountants and bookkeepers, as well as a variety of finance-related topics such as cash flow and different types of accounting. Be sure to listen to the end of the episode as Jamon shares the vision for Season 2 of Building Infinite Red.

Show Links & Resources

• YNAB – You Need A Budget
• Saturday Night Live Highlight: First CityWide Change Bank

Episode Transcript

TODD WERTH: Hello, everyone. Today we were talking about which topic to talk about, and we had the idea, how can we come up with a topic that's extremely boring, that no one wants to talk about, but actually is super important? So, we're going to talk about lawyers, accountants, bookkeepers, finance, and other things. Basically, how to start a business and still feed your family.

Let's start off with you, Ken. If I were starting in business and you and I are sitting in the airport and I knew you had started one and I asked, "Hey, Ken. What should I worry about first off when I'm starting a business?" What would you say?

KEN MILLER: I would tell you to go find a good accountant and a good lawyer right away. You don't need to pay them to set up the business for you. You can do that yourself or you can use a service like LegalZoom or something like that. But you need to have somebody who is familiar with the kind of business that you're planning to do. We have a great lawyer who happens to specialize in digital agencies.

I've got an accountant that I've personally worked with for many, many years. It's not the cheapest, like you want your accountant to be good. A bookkeeper is sort of a different matter since your accountant is not doing your day to day books, and you don't necessarily need a bookkeeper right away because you're probably not going to have a lot of transactions right away. To be honest, I found it was helpful for me to just do it personally for a little period because then I understood what was going on better.

JAMON HOLMGREN: Ken, what's the difference for those who may not know between an accountant and a bookkeeper?

KEN: Well, I'm told bookkeeper is a little bit old fashioned, but it's still very descriptive. Your accountant, aka your CPA, your Certified Public Accountant, that is someone who will do your state and federal and maybe even international taxes for you. They may or may not have people who will keep your books and stuff. Now, bookkeepers, they're the ones who will record transactions coming in and going out basically, so that your books are an accurate reflection of what's happening in your business.

Todd, do you want to interject?

TODD: Yeah, just real quick. Sorry to be pedantic, but my wife's an accountant. Bookkeepers often are not accountants. Some of them are just people who started doing books at their company and continue to do it. When you get to accountants, you have two types of accountants: One is CPA, which is a tax accountant; and then there are other accountants who specialize in corporate stuff, like my wife. She went to college for it and is highly trained.

KEN: That's the kind I recommend you get, is the kind of who is trained in accounting practices.

JAMON: First of all, what's the more modern term for a bookkeeper? Is there?

KEN: I think Heather liked the term, what was it? Financial assistant, something like that?

JAMON: Okay.

TODD: I think that's what she said. Heather is my wife, by the way.

JAMON: And then secondly, what does an accountant give you that a financial assistant does not?

KEN: Well, A, They are literally certified by the state. And B, They have experience in tax law.

JAMON: CPA does, but they're more corporate accountant. They're going to bring more like ... It's my understanding that they can bring more strategic ...

KEN: Yeah, they can be more strategic help, they can help you design your practices for paying people, for collecting money, because there's just a lot of i's and t's that need to be dotted and crossed.

JAMON: Yeah, that makes sense.

TODD: Yeah, not to keep on interrupting about accounting. Sorry, my wife's an accountant.

JAMON: We're gonna play a little game. How many times will Todd mention that his wife is an accountant?

TODD: All CPAs are accountants. Not all accountants are CPAs. My wife has absolutely no intere...