New businesses require plenty of administrative and accounting setup during their startup phase. Yet throughout their day-to-day operations, a small business owner will still need assistance with a variety of accounting tasks. Instead of doing these tasks themselves, many small business owners consider outsourcing those tasks to a tax professional or accountant. Here are just four of the services that your accountant may be able to offer your small business.
Payroll and Retirement Planning Services
When it comes to understanding the intricacies of payroll, this task can quickly become overwhelming for a majority of small business owners. There are several different taxes that need to be paid on a quarterly basis, as well as other deductions. Some of your employees may also have garnishments or child support deductions that need to be cared for. Then there are the 401(k) contributions and insurance payments. It can quickly become overwhelming.
By outsourcing your payroll to an accounting service, the professionals can assist you in avoiding potential tax penalties and fines by keeping you on track with your filings and payments. They can also handle the paperwork necessary for new hires. Thus, your business growth does not need to mean additional administrative work for you. At the same time, you may see cost savings by not having to pay for continual education for an employee in-house.
Bookkeeping and Tracking
Every business needs to track its expenses and income on a monthly basis. This will help you to see areas where you might need to reduce spending and others where additional spending is necessary. Understanding your income and expenses can also assist you in setting realistic budgets for your business. There are multiple ways to keep your books.
Two main practices are cash basis or accrual accounting. Both have their pros and cons. By using an accounting professional, you can find the method that works best for your business and assist you in setting it up. In addition, bookkeeping services can help you keep up with your financial entries, making sure your books are accurate throughout the year.
Accounting Options
When it comes time to close out your financial year, an accounting service can be a definite plus in producing your financial statements. They can assist you in understanding the financial health of your business. Accounting services can also suggest ways in which you can put various checks and balances throughout your financial practices, making sure you have the ability to know exactly how the funds are being spent in your business. Financial statements can also be helpful when considering a loan for additional funds to expand your business or to assist in equipment purchases.
Understanding your profit margin and what you can legitimately afford to do within a given financial period is also important. By using an accounting service, you can get an unbiased view of your finances and where your business is headed.
Tax Return Preparation
Preparing your taxes for a small business can be a complicated task, especially as the requirements change from year to year. In addition, there are deductions. It can be difficult to know which deductions are appropriate for your business and which ones do not apply. By using an accounting service, you can have assistance with the filing of all the appropriate paperwork, as well as making sure that you know how much to pay on a quarterly basis. They can also give you options that can assist in lowering your tax liability over a specific financial period.
By following through with bookkeeping and accounting services, tax time can also be less stressful because you do not need to try to complete all your financial recording in a short period of time or search for multiple receipts and data sources. Instead, you will find yourself prepared with all the necessary information to make tax preparation and filing less stressful.
When choosing an accounting firm, the best option is one that provides all these services. Thus, your accounting professional can get familiar with the specific needs of your business. They will also be able to suggest potential options to you as a business owner to better manage your bookkeeping. This means that you will be able to avoid making key mistakes that could end up costing your business money.
In the final analysis, hiring an accounting service can provide multiple benefits. It can reduce your administrative workload, provide accurate bookkeeping and accounting capabilities for your small business and give you the benefit of their knowledge during tax season.
