Jodi Kerr, CPA, and TDT Tax Partner, provides insight to outsourcing your accounting and the mistakes that can be avoided in the process. Jodi specializes in small business consulting, individual and business tax compliance.
Having accurate, detailed, and well-organized financial information is important when it comes to your tax return, but even more important for managing your business. Knowing your financial position and profitability throughout the year will allow you to make informed business decisions. Developing a budget or calculating projections for the future is easier when you have good historical information to guide you.
Have you ever had a nasty surprise on your income taxes? Did you wish you would have known ahead of time what the outcome might be so you could identify ways to change the result? Tax planning can be a critical step in managing your business and avoiding surprises. The success of making good decisions before the end of the year is dependent upon accurate and complete financial reports.
Sometimes, small businesses can’t afford the cost of a full-time, qualified staff to perform accounting duties. Outsourcing the functions that require a high level of expertise may be a good approach.. Below is a list of some of the most common services provided by firms with a staff of well-trained and experienced professionals.
- Payroll calculations and related report preparation
- Prepare financial statements (full accrual or cash basis)
- Prepare sales tax reports
- Reconcile bank and credit card statements
- Reconcile loan activity
- Prepare vendor bill payments
- Prepare customer invoices
Making Costly Mistakes
Payroll preparation and reporting ranks high on the list in the area of difficulty. There are many errors that can take place in this area. The laws and reporting requirements change frequently and it’s difficult to keep up. Making mistakes can be costly as well, due to fines and penalties assessed for errors in calculations, reporting and timing of payroll tax deposits. In some cases, tax credits available for employing certain individuals are missed due to lack of knowledge about the credits.
Spend some time considering if there are accounting functions you could use some help or added expertise with. If you have room for improvement and would like some assistance or a fee quote for services, call your local TDT office today to request more information.