Partnering with an annual tax accountant has been the default for small businesses for decades. They’re not overly expensive, and they get right to the point: filing your taxes.
But is that enough? Not for businesses with the potential to grow.
Luckily, another solution – monthly accounting – can fill the three gaps that annual tax accountants leave wiiiiiide open. Let’s talk about what those gaps are!
At CSI Accounting & Payroll, we’ve provided monthly accounting for nearly 60 years. That means we’ve really nailed down the differences between annual tax prep and monthly accounting, including the gaps in:
- Business insights
- Communication and advice
- Tax strategy and savings
Gaps in Business Insights
Annual Tax Preparers
You only get financial statements from annual tax preparers once a year.
What’s wrong with that? They’re just overviews of your prior year. You had no opportunities throughout the year to make informed changes.
Monthly Accountants
On the other hand, monthly accountants make financial statements for you each month! This means you have twelve times the financial insight – and that’s only counting some numbers on paper.
Because you get statements each month, you can use this information all year long. You’ll have a clear understanding of your cash flow, the ability to catch and correct errors faster, and even the potential to lower your tax liability. But do you know how?
Don’t worry – we’re just getting started! There’s much more to say about professional guidance and tax strategy with monthly accounting – so we’ll break them down in the following sections.
Gaps in Communication & Advice
Annual Tax Preparers
Annual tax preparers only meet with you… well, annually. That means that’s the reach of their advice, too. You get annual financial statements combined with what’s essentially an annual Q&A session.
If you’re lucky enough to reach your accountant outside of this session, they’ll charge you by the minute to advise you. It’s definitely not everyone’s cup of tea.
Monthly Accountants
Luckily, there’s a lot of professional advice that monthly accountants can provide. They have more timely financial data to advise you with, and you can meet with them each month.
The best part? They’re only a call, text, or email away – and unlimited one-off questions are included in your monthly investment!
We’re not done yet – because year-round advice includes a complete tax strategy… which is yet another huge gap that annual tax preparers leave open.
Gaps in Tax Strategy & Savings
Annual Tax Preparers
Taxes are the main focus of annual tax preparers. However, even this is limited. They take your already-prepared bookkeeping data and plug it into tax forms.
They likely don’t know your business enough to recommend any credits. They can’t tell you how much you might owe in taxes ahead of time. Finally, because they don’t work with you year-round, they can’t actually help you minimize your taxes. What you owe is what you owe, plain and simple.
Monthly Accountants
Annual taxes are included in your monthly accounting investment, so you won’t need to work with both a monthly and an annual accountant!
The way that monthly accountants handle taxes is the same way they handle everything else: year-round, and strategically. They do everything that annual tax preparers can’t do via a complete tax strategy.
They handle your bookkeeping year-round, opening a lot of opportunities to help you minimize your taxes. They can also provide tax projections and might even be able to identify great tax credit opportunities.
Note: Tax strategy is also most beneficial long-term, year-over-year. Did you know that even if an accountant saves you money on your taxes one year, that can be detrimental to you the following year? Here’s an example of how paying more in taxes now might actually help you save even more in taxes later.
Fill Those Accounting Gaps!
Don’t get us wrong – annual accounting (paired with bookkeeping) is a decent option for small business owners who are just starting out. However, once you grow, you can (and should) expand your accounting investment.
Now that you know about the gaps that annual tax accountants leave in business insights, advice, and taxes, are you ready to check out monthly accounting services?
If so, please consider CSI Accounting & Payroll! To see if we can be a good fit for your business, click the button below for a free consultation:
Not ready to talk? That’s okay! First, learn more about what it’s like to work with us by clicking the image below:
