Tom Janney is the architect behind a top local firm
By Matt Ledger
Upon arriving at the University of Tennessee in Knoxville, Tom Janney began his college days as an architecture major. However, instead of mastering the ability to create blueprints, he revised his plan and chose to learn “the language of business.”
Little did he know at the time, that decision would lead him to becoming the lead architect and builder of one of the most successful accounting firms in the region, Janney and Associates.
Tech strategy for recovery and growth
Janney graduated in 1985 with a bachelor’s in accounting and started with one of the largest accounting firms in the world at the time, Arthur Andersen. A year later in 1986, he decided to move back to Smithville, learning accounting at a local firm for several years.
After a few years of contract work, he drafted a business plan to found Janney and Associates, CPA’s.
A significant part of the company’s expansion came from customer referrals through the years, leading to a few satellite offices in Livingston and Carthage. “As time has gone on, we’ve become more and more focused on small family-owned businesses,” he says.
Janney and Associates eventually returned to a primary office in Smithville, with the firm’s foundation remaining in tax preparation. But, as for many, the recession of 2008 led to some hard decisions of consolidating locations and reducing employees. Janney also needed to innovate with technology, which helped streamline the office. Eight employees now provide payroll, bookkeeping and consulting services throughout the year.
“We haven’t needed as many employees because now we can significantly leverage new technology in preparing returns,” Janney says. “When people drop off tax information, we are able to scan it into our system, and our software can input that automatically. We’re no longer bound to those paper documents and manual computations.”
Tom Janney * also serves as a financial advisor for business clients and individual investors. “The first step seems obvious, but get in the habit of saving early,” he says. “It needs to be automatic every month, just like a utility bill.” He suggests starting with a quality mutual fund.
A Valuable Connection
Investing into technology-based infrastructure is vital to running a successful business. “It’s critical for us to have a very good Internet connection,” Janney says. “We rely on that day in and day out. It’s the life-blood of our business, and that’s why we choose DTC services.”
Tax season can be especially taxing on accounting offices, so reliable services are a must, and Janney has continually upgraded to DTC’s highest current Internet speed over the past decade. After DTC added security systems to their menu of services, Janney changed from another provider to DTC’s 1st Choice Security that now safeguards the firm’s tax and accounting documents.
“We’ve been with DTC since day one with our telephone system and when Internet access became available,” Janney says. “I try to shop locally when possible, and they’ve been extremely involved in the community.”
He prides himself on being on the front end of tech trends — “a technology company that happens to do a bit of accounting” — recalling a $700 fax machine purchase in the early ’90s. “I remember people telling me, ‘Who needs anything that quickly?’” he says, as customers continued to personally deliver documents. Many people even resisted leaving recorded voice mail messages when those began.
“We’ve gone from that extreme to the other,” Janney says. “It’s amazing how we’ve all become so reliant on technology that we don’t even realize it. Anyone who thinks that having a website is optional simply needs to update their thinking, because your website is the new front door for your business.”
Janney and Associates opted to add a secure online portal for clients to access their information, much like a bank. For 2014, this new feature allowed several clients to skip Janney’s office entirely by scanning and sending their tax documents. He expects that trend to grow in the next few years.
“DTC is always very responsive if we need something,” Janney says. “In those very rare occasions when something may go wrong with technology, they were here in a matter of minutes.”
*Securities offered through H.D. Vest Investment ServicesSM, Member SIPC, Advisory services offered through H.D. Vest Advisory ServicesSM, 6333 N. State Highway 161, Fourth Floor, Irving, TX 75038, 972-870-6000. Janney & Associates, CPAs, PC is not a registered broker/dealer or independent advisory firm.
Accounting gets complicated quickly, but Janney says there are a few simple tips to help out local business owners and taxpayers.
Business owners may think about paying down principal on debt in their business at tax time; however, the interest is the only tax deduction. Janney cautions that debt reduction is tricky and can sometimes lead owners to unnecessarily overextend themselves for gains that are realized years down the road.
For farmers or other small business owners, it may be tempting to reduce their tax burden with capital investments. “Purchasing equipment will give you a great tax break, but do you need the equipment?” Janney asks. “If the answer is no, you’re throwing good money after bad. Your taxes may go to zero, but if you’re not getting a return on your investment, if it’s not helping to make you money, then you’re better off paying the income tax.”
Many individuals can complete simple tax returns online, but Janney cautions that as taxpayers’ lives become more complex, so do their tax credits and obligations. That’s when it’s best to seek an accountant.
The most common investing mistake made by employees is not participating in a retirement plan, especially for those with an employer match. “The younger you are when you start participating in those individual retirement accounts, the better off you are,” Janney says.
Cashing out an IRA upon changing careers is a bad idea in most cases because it creates a tax penalty and will delay retirement to a later age. For those closing in on that finish line, Janney suggests meeting with a consultant to strategically plan how to get the most out of social security. “Even though people tend to relax when they retire, your taxes continue on,” Janney says.
Don’t ignore a notice from the IRS. The longer the issue remains unresolved, the more penalties and interest will add up. “Don’t ever think that it will just go away,” Janney says. “You have to face it head-on, no matter the circumstance, and if you don’t understand it, you must find someone who does.”