How Professional Bookkeeping Can Ensure Small Businesses are Tax Compliant
Every business needs a bookkeeper, whether it is a one-person operation or a rapidly expanding startup with payroll taxes.
A competent bookkeeper keeps your company on track and provides you with insight into your cash flow in addition to managing day-to-day finances. While it is possible to learn the fundamentals of bookkeeping, expanding your company would be a better use of your time. The following are some advantages of hiring a bookkeeper for your company:
- Saves you time
You must dedicate dozens of hours each month to managing your finances and bookkeeping. You always put it last on your list because it takes so much time and effort. Then, as the tax filing deadline draws near, you have to work quickly to catch up.
Spending time on non-core activities like bookkeeping could prevent your company from reaching its full potential. You can spend more time concentrating on what is most important to your business by giving a bookkeeper the responsibility for handling your accounts.
- Prevents errors
As innocent as they may be, mistakes are costly. Not only could you record the wrong information, but misreporting any income or expenses could result in a fine from the IRS or make you pay more than you have to. It is a bookkeeper’s job to record all your numbers, receipts, bills, and invoices correctly into your accounting software.
- Keeps your books up to date
Cash flow is crucial to a business’s ability to operate successfully. If you don’t understand your finances and profit, you must largely guess whether you will be able to expand your company. While an accountant handles your tax returns and provides you with strategic advice, a bookkeeper has more direct control over your cash flow.
- Keeps your cash flowing
Your bookkeeper has a good understanding of your earnings, outgoings, and spending patterns because they are tasked with keeping track of all of your daily invoices, receipts, and other transactions.
Their focus on your accounts will help you comprehend the performance of your company and spot cash flow problems as they materialize.
- Can even increase your profits
When businesses hire bookkeepers, their profits typically rise by 16%. The primary reason is that bookkeepers have the expertise to manage your bookwork effectively, giving you more time to concentrate on other aspects of your business (like boosting profits).
- Cost-efficient and scalable
Depending on your company’s size, scope, and nature, outsourcing your bookkeeping may be more economical than doing it internally. Since their only responsibility is to maintain your books and keep them organized and in compliance, external bookkeepers aren’t distracted by the ups and downs of your company.
Additionally, as your company expands, your bookkeeper can scale with you, taking on more or less work as necessary.
Don’t Forget About the W-9 Deadline
There is no deadline for gathering the W-9 form because it is not required to be sent to the IRS. It is mainly used by a company to collect accurate information from taxpayers. However, the W-9 is used to submit your 1099 form, which has a deadline of January 31st.
The best decision a small business owner can make to ensure overall success is to hire a committed bookkeeper like Kats Bookkeeping. A bookkeeper is a wise investment for any business because they help you save time and money, concentrate on your area of expertise, and increase cash flow.
Contact Kats Bookkeeping today to learn how we can help you stay tax compliant for the 2022 tax year.