“Can you just do my taxes? I’m all set on bookkeeping.”
We hear this occasionally – and we get it! Small business owners have limited budgets and want to save money wherever they can. That means many will try to do their own bookkeeping (or have an administrative person try to handle it on the side).
However, there are a few reasons why we don’t just handle annual tax filing. Let’s talk about the potential errors and missed opportunities that can occur if you skip on the full service.
At CSI Accounting & Payroll, we’ve provided year-round accounting and tax services for nearly 60 years. That means we’ve spoken to thousands of prospective clients who have wanted the full service – and thousands more who have just wanted annual tax filing. They often ask:
- What’s wrong with doing my own bookkeeping?
- Why won’t CSI just do my taxes? What problems can occur?
- What are the benefits of combining bookkeeping and taxes?
Problems With Doing Your Own Bookkeeping
These days, it’s easier than ever to do your own bookkeeping with the help of professional, big-name software – and it can be a decent choice for very small or very new businesses. (Just understand that you’re getting a limited value!)
However, if you don’t know what you’re doing, there’s a big chance that you can run into these problems:
- Run-on bookkeeping errors. Bookkeeping numbers build on themselves. If your January books were wrong and you never fixed them, then your books all through December will still be wrong.
- Penalties. These result from bookkeeping mistakes and falling behind once tax season rolls around.
- Incorrect financial statements. Monthly statements can’t guide business decisions if they’re incorrect!
- No audit protection. Audits can happen at random or even be triggered by mistakes. If you’re handling your own books, you may also need to handle an audit.
- Poor use of time. This is huge. What is your time worth? Your time is already limited due to owner responsibilities, and the value of your time is too high to spend on bookkeeping. Work on your business, not in it.
Still just want your taxes done? Then you’re better off going to an annual tax preparer! But remember, just because you haven’t run into issues with doing your bookkeeping yet, doesn’t mean you never will.
Problems With Only Outsourcing Taxes
There can be a few problems that arise when you only outsource your taxes. Let’s address the three major gaps that annual tax preparation leaves wide open – but monthly accounting helps fill.
Here’s what annual tax accountants leave out (which is much of what we mean when we say partially-outsourced accounting is a limited value):
- Gaps in business insights. You only get financial statements once a year. That means you had no opportunities throughout the year to make informed changes.
- Gaps in communication and advice. You only meet once a year, which means you essentially get one Q&A session per year. Outside of that, they’ll charge by the minute to advise you.
- Gaps in tax strategy and savings. Even taxes are limited. They plug your bookkeeping data into tax forms, but they can’t give advice or tell you what you might owe ahead of time, or help minimize your taxes since they don’t work with you year-round.
What if there was something better…? A way to upgrade your accounting investment…? Luckily, monthly accounting fills these gaps and provides a huge value!
Benefits of Outsourcing Bookkeeping & Taxes
When you fully outsource all of your accounting – meaning taxes and bookkeeping – the benefits are astounding. This is called monthly accounting, and it’s a well-beaten path to your best tax season. Plus, your annual tax preparation and filing fee is included in your fixed monthly accounting fee!
With outsourced taxes and bookkeeping hand-in-hand, you get these benefits:
- Better integration and minimized errors. A tax service can only use the data that your bookkeeping service gives them, but if you bundle, your books are directly translated to your year-end taxes by professionals who know your business and understand your numbers.
- Year-round tax planning. A bookkeeping service’s tax planning can fall flat if your tax service isn’t aware of the strategy. However, a bundled service can use a complete tax strategy, identifying opportunities for deductions, credits, and strategies to save you money.
- Bundled value. With a bundled service, there is combined efficiency and accuracy, giving incentives to pass the savings to loyal customers (like you).
Avoid the Issues & Reap the Benefits!
Now that you know about potential issues with doing your own bookkeeping, what problems can occur if you don’t bundle bookkeeping and tax services, and the benefits you can get when you bundle them, 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:
