Benefits of Outsourced Accounting Services Highlighted by Ongoing Coronavirus Pandemic
Business leaders face high scrutiny, many are deciding to outsource essential accounting functions.
If you’re a small business owner, you’re constantly managing moving parts. You have your hands full with all kinds of tasks and responsibilities.
From big picture strategy and marketing initiatives to sales and customer service, there isn’t an aspect of the business you don’t touch. This includes finances.
But with so much riding on taxes and accounting, it’s imperative that you not handle this aspect of your business on your own. Hiring a small business tax advisor is the smart choice.
The Benefits of Hiring a Tax Advisor
Though it’s not recommended, individuals can get away with filing their own taxes. Small businesses, on the other hand, shouldn’t even think about taking the DIY approach.
There’s simply too much on the line. Here’s why you ought to hire a small business tax advisor.
Taxes are complicated.
There’s margin for error and creative freedom in such areas as marketing, sales, graphic, design, and customer service. The same can’t be said of taxes. They’re complicated and serious in nature, so a tax advisor will ensure you play by the rules.
You have limited time.
Time is one of the business owner’s most precious assets. You can’t purchase more of it, nor can you get it back once it’s gone. In effect, time is money. Any time you have to spend doing taxes and accounting is less time you have to generate revenue for your firm. A tax advisor will save you time and allow you to focus on the activities that directly affect the bottom line.
Savings > cost.
A tax advisor isn’t free. However, the up-front cost of securing those services is minimal in comparison to the savings that a talented professional yields. In many cases, tax advisors provide four or five times the value he or she charges. This makes it a wise business investment.
Big picture strategy.
A small business tax advisor does more than just prepare tax returns. In addition to performing basic audits and filing taxes, the professional assists your business in planning for the future. This is how a skilled advisor reduces your tax burden over time, and potentially saves your organization thousands of dollars over the coming years.
Peace of mind.
When it’s all said and done, a small business tax advisor guarantees peace of mind that isn’t as attainable when you try to handle your finances on your own. Tax advisors live and breathe taxes. They understand what the IRS looks for, as well as how to maximize your savings. Thus, they can ease your stress, reduce your anxiety, and help you win.
How to Find the Right Small Business Tax Advisor
Do the smart thing and hire a tax advisor. Here are some tips on how to find the right professional for the job:
Define the Role
It’s crucial to start by clearly defining what role you want a small business tax advisor to play. Each one brings different skills and experiences to the table.
Are you looking for someone primarily to file your small business tax return every year? Do you want someone to provide tax strategy and advice to help you depreciate assets properly and save the most money possible over the long run?
Do you anticipate needing help with any sort of tax complications or legal troubles? The more specifically you define what you’re looking for, the easier it becomes to narrow down the list of potential candidates.
Understand the Designations
The term “tax advisor” is fairly generic. It can be used to describe any number of people—including individuals who have no professional certifications in the tax field.
That’s why it’s critical to locate professionals who have those designations. Some of the most common titles include:
These individuals have a law degree and specialize in the legal side of business taxes. They’re especially valuable if you’re facing an issue such as tax fraud. However, they’re also suitable for helping you plan for the future.
This is a tax professional who is to represent taxpayers before the IRS in the appropriate situations. This individual cannot, however, represent clients before a tax court. It’s a specially designated position that only applies to IRS-related issues. However, most enrolled agents also carry other certifications and designations.
The title of certified public accountant (CPA) is one of the most highly respected in the industry. In order for an accountant to become a CPA, he or she must pass rigorous exams and meet other qualifications.
Depending on the duties and responsibilities you’re hiring a tax advisor to handle, you may be drawn toward a particular designation. If your needs are fairly general, a CPA is a safe bet.
If you’re a business owner, you’re probably operating in close proximity to other business owners. They likely have experience hiring tax advisors. This makes them excellent sources for referrals.
The great thing about getting a referral from someone you trust is that it instantly adds a degree of credibility you can use to make an intelligent and useful decision that you’ll be comfortable moving forward with. If you get multiple referrals for the same advisor, that’s an even better sign.
Perform Your Due Diligence
Regardless of whether you have a referral or not, you need to do your due diligence on investigating any tax advisor you’re considering. In particular, study qualifications like experience, specialties, certifications, online reviews, ratings, association memberships, and the like.
Once you have a short list of candidates you’re comfortable with, take the time to get to know them. You should set up interviews with at least two or three different people to get a feel for the things they bring to the table.
During your interviews, ask open-ended questions that get the person to talk. You want to hear how he or she answers questions, as well as what the person says. Is this candidate a problem solver? Is he or she comfortable in communicating? Does the person sound confident?
An interview is as much about establishing rapport and identifying your gut feelings about the people as it is about getting the correct technical answers. Take both factors into account.
Discuss Fees and Expenses
Don’t go too far along in the decision-making process without discussing fees and expenses. Some tax advisors work on a retainer, while others have an hourly fee. Some may require a range of fixed fees for different tasks.
You’ll discover that small business tax advisor fees are all over the board. Generally speaking, more experienced and qualified advisors will charge more, while younger advisors will expect less.
You’ll have to weigh the pros and cons, whichever end of the spectrum you land.
Make a Decision
Be patient and take your time. It’s essential that you conduct thorough due diligence so you can make an informed decision. When it comes time to make your selection, you’ll feel at peace with it.
If, after all your research, you fail to find someone you’re comfortable with, renew the search. There are plenty of small business tax advisors out there. Eventually, you’ll find one you like.
Taxfyle: Your Trusted Online Tax Service
There are plenty of small business tax advisors in the marketplace, so trying to find the right one can be a challenge. With Taxfyle, we’ve already done the hard work for you by compiling a rich network of U.S. based CPAs and EAs who are qualified and ready to assist your small business with all its tax advisory needs.
For more information about our on-demand tax services for individuals and small businesses, please contact us today!
Get the latest posts delivered right to your inbox