No. For most med spas, fall is the best time to switch. It gives a new accountant two to three months to clean up the books and plan your taxes before December 31. Wait until February, and your new accountant inherits a closed year and can only file whatever the numbers say.
At Liguori Accounting, we work only with med spas, and many of our clients come to us mid-year. Usually they’ve been frustrated with a generalist CPA or have outgrown DIY bookkeeping. When you switch matters less than people think. Putting it off matters more.
Why is fall a better time to switch than January?
Tax planning only works before the year ends. Equipment timing, retirement contributions, estimated payments, owner compensation, and the MSO true-up all have to be handled by December 31. A new accountant who starts in October can still act on them. One who starts in February can only report what already happened.
That’s the difference between tax compliance and tax strategy. It’s also why the strategies in our guide to reducing your med spa’s taxable income need lead time.
Switching in January also means your new firm is cleaning up last year during tax season, the busiest stretch of the year for everyone involved.
What do we usually find when a med spa’s books come over?
Most messy books aren’t messy because the owner was careless. They’re messy because they were set up by someone who didn’t know how a med spa makes money. These are the patterns we see again and again.
Loans recorded as expenses. The full loan payment gets expensed instead of being split into principal and interest. Profit looks lower than it is, and the loan balance on the books is wrong. We explain why this matters in why your med spa’s P&L isn’t telling you the whole story.
Equipment with no asset record. A $100,000 device shows up as a one-time expense with no fixed asset or depreciation schedule behind it. Then nobody can tell you what’s left to deduct or what the asset is worth if you sell.
Packages and gift cards booked as revenue. Money collected for services not yet delivered is a liability, not income. More in our post on deferred revenue for med spas.
Inventory expensed when it’s purchased. Filler on the shelf is an asset until it’s used.
One set of books for two entities. For MSO practices, this is the cleanup that matters most before year end.
All revenue in one account. Injectables, devices, skincare, and memberships get blended together, so margin analysis is impossible. Our guide to structuring your chart of accounts shows the fix.
Accounts that haven’t been reconciled in months. If the bank balance and the books don’t agree, nothing else can be trusted.
What does a med spa specialist catch that a generalist misses?
A generalist can keep the books balanced. What they usually can’t do is tell you whether the books are built to answer the questions a med spa owner actually has.
“Something that sets us apart is the fact that we do know the EMR systems, and we know which reports to pull and where the common setup mistakes are, versus someone who is industry agnostic.” Nick Liguori, CPA
That knowledge shows up in the details: how services are categorized in your EMR, whether discounts reach your revenue reports, how provider pay is coded, and whether your structure follows your MSA. We cover the EMR side in what your med spa should be pulling from your EMR every month.
How does switching actually work?
Your books and records belong to your business, so most of what a new firm needs comes straight from you. That usually includes access to your accounting software, bank and credit card statements, your last two tax returns, payroll reports, loan statements and equipment purchase documents, EMR reporting access, and your MSA if you run an MSO.
Cleanup comes first: reconciling accounts, fixing classifications, and getting the balance sheet right. How far back that goes depends on what we find. After that comes a regular monthly close and a year-end projection, so there’s a plan in place before December 31.
What should you ask before hiring a new accountant?
Ask how many med spa clients they serve, which EMR systems they know, and whether they’ve worked with MSO structures. Ask how quickly they respond and who your day-to-day contact will be. And ask what they’ll do for you before December 31, not just in April.
Frequently asked questions
Will switching accountants in the middle of the year mess up my taxes?
No. The return covers the full year no matter who prepares it. A mid-year switch usually improves the return, because the new accountant cleans up the books before filing instead of working from what the last one left behind.
My books are a mess. Is that embarrassing to bring to a new firm?
Not at all. Messy books are the most common thing we see from new clients, and it’s usually a setup problem, not an effort problem. The sooner we see them, the more of this year we can fix.
What does bad bookkeeping from a previous accountant usually look like?
Loans and equipment recorded wrong, package sales counted as revenue, all income lumped into one account, and accounts that haven’t been reconciled. For MSO practices, it’s often one set of books doing the job of two. [From Nick’s talking points. Confirm answer with Nick.]
Do I have to switch bookkeeping and tax at the same time?
No. Many practices start with bookkeeping and add tax or CFO support as they grow. Having everything under one roof does make year-end planning simpler, because the same team sees the whole picture.
How long does cleanup take?
It depends on how far back the problems go and how many entities are involved. A single-location practice with a few months of issues moves much faster than an MSO with a year of commingled accounts. We’ll give you a clear picture after the first review.
If you’ve been meaning to make the change, October is the month to do it. Book a discovery call and we’ll show you what we’d fix first.
