There are certain aspects of running a business that entrepreneurs find particularly unpleasant such as bookkeeping. This is what a 2014 survey from GoDaddy.com conducted on 600 small companies showed. When someone starts a business, they essentially focus on securing financing, repaying their commercial loans, and generating sales revenues. Very few startups view tax compliance as a priority, until they receive a threatening letter from the IRS. This article discusses how bookkeeping services can preserve you from tax hassles.
Greater time efficiency
Completing corporate tax returns can be very time-consuming, especially if you don't have sound knowledge on tax regulations that apply to your company. In its survey, GoDaddy.com reported that 40% of small business owners spend more than 6 hours to file their tax returns each year.
Considering that time is one of the few resources that entrepreneurs are constantly running after, it's now easy to understand why tax compliance is not one of the top priorities. Bookkeeping services are essential in this type of situation as they keep the company compliant, while the owner can focus on developing new growth strategies.
Avoiding IRS fines
During the tax season, the federal government conducts audits to ensure that each company pays its fair share of taxes. Because of the implications of the Obamacare, which took effect on Jan 1st, start-ups are strongly advised to hire tax experts for assistance.
As you might know, the Affordable Care Act requires businesses to enroll all of their employees. While this is beneficial to workers, it has financial repercussions on companies' finances that must be properly recorded by the bookkeeper. And since tax professionals rely on the quality of the bookkeeping records, it's essential that the business' finances be maintained in good order.
Failure to do so will increase the probability that an error be made when filing taxes, and ultimately lead to unnecessary expenses. The IRS holds both corporations and individual taxpayers accountable for improper filing of their tax returns.
Making the best use of modern technology
Start-ups have managed to apply modern technology to certain aspects of their operations such as payment automation or communications. However, many of them still haven't extended the use of modern technology to financial management yet, and keep on maintaining paper records of their financial transactions. What they should do is switch to accounting software that will help them perform bookkeeping more smoothly, and better manage their taxes.
You shouldn't go through tax issues because of poor financial management. Make the right move today by either hiring bookkeeping services or installing accounting software to gain in overall efficiency. To learn more, contact a company like Kamphaus Henning & Hood with any questions you have.