Most business owners know the benefits of entrusting their books and their tax returns to professional accountants. Doing so allows them to focus more of their time on the day-to-day needs of operating a business, and ensures greater accuracy on their financials. But fewer business owners realize that entrusting both of these tasks—filing their business’s tax returns and maintaining their business’s books—also offers many benefits to their company.
Greater Accuracy and Consistency
It’s extremely important that your taxes and your company’s books show the same numbers. If they don’t, you could face serious ramifications if your business is audited. When you have separate accountants working on your taxes and maintaining your books, your financial information can get caught up in a game of “Telephone,” as you pass information back and forth between these different individuals. And, as anyone who’s played this childhood game can tell you, “Telephone” rarely results in accurate end results.
For example, let’s say you send your tax account your completed financials from the previous year so that they can begin working on your tax return. Meanwhile, your bookkeeper updates those financials to include some income that had been earned right at the end of the previous year, but was only recently paid by your client, and so was not yet on the previous year’s books. However, this information does not get passed along to the tax preparer.
Several weeks later, your tax accountant sends you your tax return to review. The best case scenario here would mean that you catch the error and ask your tax accountant to correct it, resulting in additional expenses for your business. In the worst case scenario, you don’t catch the error, and you’re later audited and fined by the IRS for underreporting your business’s income.
But when your tax accountant and your bookkeeper are the same person, you don’t have to play middleman in a game of “Telephone” any longer. There is only one channel of communication for your financials, so you don’t have to worry about communication issues between separate accountants.
One of the greatest drains on productivity in the workplace is duplicate work. The last thing you want is for your employees to be doing the same tasks over and over again, resulting in wasted time and resources. And yet, if you have separate accountants for your taxes and your books, you’re doing exactly that yourself.
With separate accountants, you’ll find yourself frequently repeating yourself and sending the same financial information to both individuals. You may even end up playing the messenger between your accountants as you pass updated information back and forth. This is a drain on your personal productivity, as well as a drain on your business. When you have just one accountant performing both of these accounting tasks, you eliminate all that duplicate work and improve your productivity.
More Data Security
Each time you share your financial information with a third party, you open up opportunities for hackers and cyber thieves to steal that sensitive data. It doesn’t matter how the information is being shared—email, fax, post, or any other method of communication. There is no method of sending information that is completely foolproof, so the more frequently you send that data out, the more likely you are to become a victim of those looking to steal your information.
With multiple accountants, as already mentioned, you often have to send out the same data over and over again. When you have an accountant handle both your taxes and your books, however, you’re sending out your financials far less frequently, and are therefore reducing the odds of becoming a victim of cyber thieves.
At Biesinger & Kofford CPAs, we are able to maintain your business’s books as well as filing your company’s annual tax return. With our experienced CPAs and bookkeepers in Provo, we can provide you with precise books and accurate tax returns for your business. Contact us today to learn more about how we can help with your business’s accounting needs.