Small businesses have a tendency to try to keep everything in-house. Most business owners agree that a tax professional is essential to running a profitable business but are less convinced that it’s worth it to outsource bookkeeping. But as your operations grow, so too does the benefits of having a scalable, efficient bookkeeping system in place. Here are a few reasons why:
Tax Pros Can Offer Year Round Advice
Most tax filers treat CPAs and other tax professionals as mere seasonal contractors. But in reality, there are actions you can take throughout the year that can save you money on taxes and make filing your annual return exponentially easier. A good CPA does more than just file your return – they are able to offer advice on ways you can save money and stay compliant year round.
Bookkeeping Can Make or Break Your Business
Keeping sloppy books doesn’t just hobble your day-to-day operations – it could even wind you up in jail. Bookkeepers make it their full time job to ensure that your business is accountable and compliant. Some tax professionals won’t even take on your account if you don’t have organized books and records and if your business is audited, your life will be much easier if you can retrace your steps. Some CPAs will be able to handle your taxes as well as bookkeeping, payroll and other accounting, which lets you focus on your core competencies.
Bookkeepers and Tax Professionals Should Work Together
When it comes to filing your taxes, the person who knows your books and accounts inside out needs to sit across the table from your accountant and explain the important details and answer all the financial questions. If this person is you, it means you’re going to have to devote your valuable time to meeting with your CPA. When you let your CPA handle your books or let them setup a custom bookkeeping system for you, this streamlines the process immensely, saving you time and money.
There’s lots of overlap between bookkeeping and tax preparation. By getting both bases covered, you can focus your energy and expertise towards improving your business with the peace of mind that all of your financial ducks are in a row.