Outsourcing Business Tax Preparation Has Several Advantages
Taxes can keep accounting firms awake at night, especially during tax season. Your firm works more hours to prepare and file taxes on time so that your clients do not incur late payment penalties. A typical accounting firm’s bread and butter is tax preparation for individuals and small businesses. Your accounting firm will be poring over business tax rates and looking for the best tax deductions and credits when tax season arrives. The goal is to optimize tax deductions for your clients to maximize tax savings.
As one might expect, this is not an easy task. A small business spends many hours on tax preparation to give you an idea of the scope and scale of the work. As one might expect, accounting firms have their work cut out for them when it comes to small business tax preparation. It’s a time-consuming task that frequently requires back-and-forth with the client because they haven’t provided enough information. This exchange means that the assigned deadlines get extended indefinitely, and it is sometimes a fight to the finish.
So there’s no logic to be stressed out about taxes. Why be concerned about determining allowable business expenses for tax purposes and other related issues? Why not outsource your company’s tax preparation? It will help you manage your time more effectively and prevent you from being overburdened by tax-related tasks.
Think about tax outsourcing strategically; this is the only way to get the most out of it. Yes, it is good to outsource small business tax return preparation. But do you have everything figured out? Have you planned anything?
Here are some contemplations to keep in mind when outsourcing tax returns:
ANSWER THE QUESTION – WHY?
Typically, outsourcing taxes is a significant decision made at the top. As a result, the case for taking this step must be compelling. While affordability and lowering the cost of each tax return are the most obvious benefits, there are others. Consider the long term and the sustainable. Business tax outsourcing is about more than just freeing yourself from the burden of calculating and staying current on business tax rates. It is also about bringing in new skill sets and exploring new growth opportunities.
EVALUATING EXPERTISE OF THE PROVIDER
You understand how to file taxes for a small business. Is the tax outsourcing services provider, however, an expert? You may not concede it, but there are some ways to ensure that the provider is genuine and understands Canada’s bookkeeping inside and out. First, see if the provider is willing to provide a trial run. If so, proceed with the trial.
In most cases, the business tax outsourcing provider will prepare a set number of taxes for your company. It will give you a good representation of whether or not they know how to file small business taxes. It will help if you remember that the outsourcing provider will try to impress you, but you can still evaluate their expertise during this time. Remember that every business tax has nuance, and the calculation of business expenses for taxes varies between businesses.
THE QUALITY QUESTION
As someone who has experience with tax preparation and, more importantly, handling a large number of taxes, you will be aware that errors and omissions get expected. It is common when there isn’t enough time to conduct a thorough quality check. Work with a reputed outsourcing provider who adheres to the highest process quality standards.
Nevertheless, you should not accept these errors just because they are common. For example, you have outsourced tax preparation, and the business tax rate has been miscalculated. In this case, you could fix the error quickly, but what if other errors are ignored? As a result, you lose face with the client, and in the long run, a loss of reputation can lead to a loss of business. Hence, the terms of engagement with the tax outsourcing provider must consider quality.
Scalability, especially immediate scalability through outsourcing, is a good idea, but what about the lean season? Do you want to be restrained to an engagement model that requires you to pay for services you don’t need?
No, it does not.
Strategy, as previously stated, is everything. Don’t worry; with business tax preparation outsourcing, you can work with a provider who provides you with all the flexibility you require to build capacity for your company. If your company is looking for seasonal workers, you can add enough resources during the busy tax season and then remove some of these resources once the season is over. It would be advantageous to plan your outsourcing journey ahead of time to maximize your ROI.
You pick up the phone during business hours and try to contact your tax outsourcing provider. However, it is late at night in your provider’s time zone, and you can’t connect. It is an issue you don’t want to deal with, so work with an outsourcing services company whose outsourced tax preparers or accountants work according to your company’s time zone. Furthermore, the provider should ensure that you are always on top of your tasks.
SOURCE THE APPROPRIATE TAX PREPARATION SERVICES PROVIDER
Modern infrastructure, data security, accounting and tax expertise, engagement models, and pricing are just a few parameters to consider when selecting a tax outsourcing services provider. The goal here is to work with a reputable provider who has a proven track record of successfully managing the business taxes of a wide range of businesses. You should always work with someone who uses the best business tax software. It enables your company to reap the benefits of digital transformation and pass them on to the client.
Consider an outsourcing business partner that can deliver the efficiencies outlined above before signing that contract.