The journey of a small business is an interesting story. It’s typically filled with deals, daily management issues, and the occasional run-down with taxes. This is where small business tax services come to play.
While there are many factors related to the successes and failures of small businesses, one thing is often ignored: tax management.
If you’re a small business owner who’s worried about impending tax problems, then you need the help of a small business tax services provider. This solution is simple, but it can bring significant improvements to your business.
Here are the major reasons why you should rely on small business tax services.
- Manage Your Deductions Effectively
Try to picture this: a small business is thriving beyond expectations. Everything went well until the tax expenses arrived. This simple situation is the predicament of many small business owners around the world.
Tax payments can’t be avoided. They are small gears connected to society’s mechanism. In a way, taxes make the world go round.
As a business owner, you can do something about your taxes. In a general sense, tax payments are meant to be lowered. You can apply various methods and strategies to lower tax payments.
Some of the common deductions for your small business are supplies, vehicle expenses, salaries & wages, contract labor, depreciation, rent on business property, employee benefit programs, retirement plans, and mortgage interest. At first glance, you might think that tracking these deductions is like a walk in the park.
But can you apply the deductions effectively? Can you scan possible tax loopholes within your business records – all the while managing your business at the same time? This is where a CPA enters the picture.
A CPA can work through your small business deductions from the ground up. No stone will be left unturned, as the old saying goes. If you manage your business books alone, you might miss a deduction item or two.
With the help of a skilled CPA, you don’t need to worry about deduction shortcomings.
- Save Your Time & Energy
You’re probably aware that an entrepreneur’s time is liquid gold. Every single day, you have to allow time between yourself, your family, and your business.
What if you suddenly tried poring over your taxes? Even if you deny it, every minute spent on your books is a minute taken away from your business. Watch these minutes compound every day and you will fail to meet your business goals.
A CPA who can help you with small business tax services is a real ace. Not only will you have ample time for your small business, but you can save precious energy as well. Your stress levels will go down, too – a big bonus for your health.
- Plan for Long-Term Business Growth
According to numerous financial experts, it’s always better to have a CPA who will partner up with you all year round. In this way, you can discuss your business goals and financial milestones with your CPA.
It’s important to see tax accountants as solid business partners instead of workers who will do a specific job. As the CPA makes his or her assessment of your company’s tax situation, you will get a thorough forecast of profitability. By understanding the profit trajectory of your business, you’ll know how to take action.
Many small business owners contact CPAs for the filing of certain forms. This is a basic way of benefiting from small business tax services. Instead of doing that, you should maximize the best services that a CPA can offer.
- Avoid IRS Audits
IRS audit – this is the process feared by most business owners, second only to bankruptcy. The Internal Revenue Service or IRS is diligent enough to go after businesses that aren’t prompt in paying their owed taxes. And based on IRS performance, the organization is always successful in meeting their goal!
The IRS relies on a string of useful systems and processes which determine the businesses that need to be audited. They even use a special program known as Discriminate Income Function (DIF).
Even though the IRS is strict to a fault, you shouldn’t hold back in getting all possible tax deductions for your business. You just need to ensure that everything is documented. If the IRS is meticulous, well, you should be too.
CPAs specializing on small business tax services can help you through IRS audits through documentation, proper filing of tax forms, and systematic tax analysis. Additionally, a trustworthy CPA can assist you in making a detailed tax plan.
Basically, there’s no fool-proof way to avoid an IRS audit. But with the help of a CPA, you can prepare for a detailed explanation ahead of time.
- Gain Better Tax Awareness
An entrepreneur with enhanced tax awareness can outcompete dozens of business owners. This is possible because the entrepreneur is more aware of his or her tax situation.
Once you’ve started analyzing your business taxes on your own, you will feel the need for a CPA. It’s good to know your business books, but it’s even better to let the professional do the job.
Basically, a CPA has spent years digging through accounting books, testing formulas, and understanding taxes at all possible angles. You might miss an important tax detail, but the CPA will see it. There might even be more tax errors lurking within your business infrastructure.
Working with an accountant will raise your tax awareness on a different level. You will know how far deductions can go and how crucial tax forms are. You will also understand how a proper tax planning service can improve the cash flow of your business.
- Business Plan Improvement
Do you need to improve your business plan to reflect your current business goals? The best way to improve a business plan is to do it with a trusted CPA.
Typically, a business plan is segregated into different categories. Your trusted CPA can take a look at this plan, study tax & financial matters, and propose a strategy that you can apply.
Just bear in mind that not all CPAs are focused on improving business plans. A good CPA will possibly include business plans as part of his or her small business tax services.
What if you don’t have a business plan to begin with? Then, by all means, you should contact a CPA. This CPA will help you craft an effective business plan that will serve as your company’s solid framework.
- Business Loan Application Guidance
Another important reason for securing small business tax services is business loan application assistance. If ever you need a business loan, a capable CPA will make sure that your tax situation is better than before. This will increase your chances of getting approved for the loan.
In some situations, CPAs can point you to the best business loan providers. Don’t take such pieces of advice for granted. Learn from them and understand their potential value.
- General Company Structure Guidance
Going into business without a company structure is like navigating the sea on a broken sail. The structure will serve as a general framework that everyone in your company can refer to.
A company structure must remain consistent for many years. However, there are some instances where you need to change your company’s structure. If you’re unsure how to do it, better contact a reliable CPA.
CPAs can provide guidance when it comes to business structure improvement. Such a process is similar to creating a business plan, but there are more factors involved. With a CPA’s expertise, you can see the strong and weak points of your company.
You can consider a CPA’s business tax knowledge as immediate oversight. This can be a positive thing for your small business.
And as your business keeps on growing, structural guidance will become more important than ever.
The Most Common Accounting Services Today
Accounting firms have a diverse range of small business tax services and capabilities. Not all firms offer the same packages, but they have standard services trusted by many clients far and wide.
Knowing about the world’s common accounting services will help you prepare your business accordingly. At least, you get to know the accounting services that will work best for your business.
Cash Flow Analysis & Management
The cash flow is the lifeblood of your business. Aside from tax planning and filing, your CPA will create different types of projections to improve cash flow. This is a continuous process which will require your company’s financial documents within a given time frame.
For a small business, cash flow management is simple. However, as the business continues to grow, cash flow will become more complicated. By relying on a CPA’s cash flow expertise, you can make the necessary financial adjustments.
Based on several studies, a huge percentage of family-owned businesses fail before the new generation can take over. There are many factors related to family business failure, but one of them is poor estate planning.
If you own a family business, then you should consider getting estate planning assistance. CPAs can do this, and they can even lower estate tax payments through an efficient method.
New Business Assistance
A new business assistance service is considered a package offered by any accounting firm. The service package contains a mixture of cash flow improvement services, tax planning, general company analysis, goal-setting, and financial forecasting.
If your business is new, then you should be on the lookout for new business assistance services. CPAs who offer such assistance is worth your time because they can bring maximum advantages for your business.
Once you’ve approached a CPA about new business assistance, you can even inquire about additional small business tax services.
Accounting firms are known for their advisory and management consulting services. With this service, a CPA can take a look at your business environment and suggest the best strategies. These strategies are situational, and CPAs rely on numerous data sources (i.e. your business plan) in order to deliver an effective consulting service.
Management consulting is also special in the way that it can detect growth opportunities for your business. To gain the best results from a management consulting service, you should be transparent with your CPA. Relay the potential challenges of your company, and do not hesitate to outline your goals. You can also discuss your ideas for business growth.
Note: it’s always a good move to list down the qualities that you’re looking for in a management consultant or CPA. This will help you determine if your intended CPA is the best match for your business.
Specialty services are the best options if you value flexibility. A common specialty service is business valuation wherein the CPA can help in determining the full value of your business. Business valuation is usually done before a merger or acquisition.
Another great example is forensic accounting. Whenever something went wrong in your financial department, a forensic accountant can launch an investigation. A successful forensic accounting service relies on business documentation and the data-gathering abilities of the CPA.
Before getting a specialty service, review your company’s situation. By doing this firsthand, you can save time and money because you’d become aware of the specialty service that you need. Also, research will always be helpful.
Tax Services Outsourcing: Why Is It Better?
If you’re still trying to choose between outsourced small business tax services and an internal hire, this section will probably convince you. Hiring internal company accountants is costlier than outsourced services. On top of that, you also need an efficient hiring process which will eat up a large chunk of your time.
Now, an outsourced small business tax service provider can offer flexible terms for your company. You can outsource a CPA’s tax service for the entire tax season or for a specific period. Obviously, you can’t do that with an internal hire because of a lock-in period based on an employment contract.
And what if the business relationship with that employee didn’t click? You need to go through the process of termination and re-hiring. It’s stressful for both parties!
Don’t mind the cost of tax services outsourcing. Just imagine the benefits that await your company.
Are you ready to get the services of a reputable small business tax services company? Contact us today so one of our talented CPAs can help you!