Oh My Heavens!! Why Does Everything Cost So Much!?

Have you ever been standing at the gas pump and realized that gasoline went up by five cents a gallon overnight and wondered why? Or, standing at the meat counter in the grocery store and thinking, “How did ground beef, the cheapest meat in the store, get to be $7.99 a pound?” Or how new cars cost as much, or more than, a house did many years ago?

When did everything get so expensive?

Sticker shock, I think, is what they call it whenever you look at the price of something and you are surprised by it. I’m certain experts can explain why gasoline prices increase and how beef and cars are so expensive. I am not that expert for those things but I sure understand what is driving up the cost in my small business.

In small businesses like mine, we feel the price pressure of all the things going up around us. In addition to cost of labor and supplies increasing, the things going on in the world around us also are creating costs resulting in price increases.

For instance, cyber security is a big issue now. Several years ago whoever heard of big companies getting hacked and information stolen? But, to protect ourselves and the information we collect from clients, we now have to consider the things we must do to provide protection. I have had to add cyber insurance, a stronger firewall, and software to send more secure email attachments. These things add to my cost of doing business, which unfortunately, I have to pass on in order to stay in business.

Several years ago the Internal Revenue Service implemented a paid preparer penalty. If they pull a return or even a line item on a return and the preparer cannot substantiate the information put on the return, in addition to the taxpayer getting penalized, the preparer does as well. To ensure that I do not get hit with the preparer penalty, I have opted to obtain more information from the taxpayer. This requires more time, more documents to look through, and more cost.

The Affordable Care Act (ACA) has increased our documentation and tax preparation time considerably. There were all kinds of questions regarding Obama Care. This year everyone was supposed to receive a form from the exchange, the health insurance company (if self-insured), or from their employer. Many people did not realize that they should have received a form and there were others that were confused by the form and others that didn’t know what to do with the form. There was a lot of time spent trying to collect, include, and explain this information which resulted in more costs.

I suppose there is no service or product or industry that doesn’t face things changing that result in cost pressures. If the minimum wage increases, as our politicians are proposing, you will see a big jump in prices and probably an increase in unemployment.  But, I’ll save that for another time.  In the meantime, try not to get sticker shocked too often.

We have had some folks with sticker shock too. Our hope is that our clients don’t see these changes as thoughtless or greedy, but instead our way of keeping up with a changing world. Like gasoline, beef, and cars…. costs change for us too and we have to react to them to stay in business and provide excellent service to our most precious commodity…our clients.