There are facets of running a business that even the most savvy entrepreneur may have trouble handling by themselves. Knowing when to complete a business project on your own and when to seek outsourced business accounting help can make all the difference in freeing up your valuable time and helping to avoid the pitfalls of business ownership.
Outsourcing some of your back-office processes to a business accountant can help you do any of the following:
Set up a Tax Plan – It’s difficult to stay on top of all of the changes that come and go in tax law. In truth, tax code is complicated and the people who are most qualified to interpret the regulations are those who’ve made a career out of staying knowledgeable on and applying tax law. Outsourcing the complicated processes of preparing for tax season allow you to leverage the knowledge and experience of a professional who knows the ins-and-outs of taxes for business owners.
Pay Employees On-Time – Even if your business is a one-man show, figuring out how to pay yourself in a way that best serves your tax plan is important. Large businesses often hire accounting personnel whose main job description is taking care of payroll needs, but small businesses can benefit from outsourced payroll services that take this task off their to-do list. Outsourcing payroll saves the cost of hiring an in-house financial employee and allows you to access payroll expertise from a qualified professional.
Avoid Tax Problems – Perhaps one of the biggest mistakes you can make as a business owner is missing a tax filing deadline, claiming too many deductions, or over-paying. Penalties for missed deadlines or errors in calculation are the kinds of costly slip-ups that could spell disaster for a growing business. Outsourced accounting assistance helps make sure that your tax filing deadlines are handled and that you aren’t giving the IRS too little or too much of your hard-earned money.
Training and Assistance When you Need it – Beyond the back-office tasks that accountants and bookkeepers handle for small business owners, outsourcing your accounting needs to a trained professional allows you to benefit from their experience whenever you may need it. If you need training on accounting software or have a bookkeeping question and need a reliable answer, your outsourced small business accountant can assist.
Tunney & Associates supports small business with outsourced tax planning and preparation, small business accounting, and payroll services. To learn more about how we can help your small business, contact our Downtown Chicago accounting firm today.
The success of any small business comes down to your ability to account for cash flow. It’s important to keep track of all money coming into your business, but it’s just as crucial to understand your business’s spending habits and outgoing expenses.
Here are some quick small business accounting tips to help keep your finances on track:
Stay On-Top of Past-Due Invoices
Issuing an invoice means that a customer owes you money, so it should be recorded as a receivable amount due to come into the business. Your cash flow can be seriously affected if that customer doesn’t pay the amount owed on time. Even worse, if the customer doesn’t pay at all you may be left with a bad debt.
As soon as an invoice is paid, update your bookkeeping system to reflect that incoming payment. You should also allocate some time to chasing down and collecting any overdue payments that could be harming your business’ cash flow.
Carefully Track All Expenses
Forgetting to keep track of expenses and receipts can cause some tax and accounting problems for your business. Ideally, you should keep copies of all receipts for business expenditures. Expenses should also be entered into bookkeeping software so they are reported correctly for accounting purposes.
Using a business credit card or check book can make it easy to track most expenses, but don’t forget to list smaller cash expenses made throughout the year too.
Where possible, try to enter the details of every expense as you incur them, instead accumulating a mountain of receipts to enter later. You’ll save yourself plenty of time by accounting for them right away and reduce the risk of losing or misplacing a receipt.
Maintain a Clear Balance Sheet
Balance sheets are designed to keep track of your business’s assets and liabilities. List any items of value your business owns as assets, such as property, machinery, or equipment. Your business’ liabilities include any outstanding loans, unpaid supplier invoices, or tax debts.
Many business owners overlook the importance of maintaining a balance sheet on a regular basis, but it’s ideal for gaining insight into your business’ financial status.
Reconcile your Business Bank Accounts Frequently
The amount you see in your bank account today may not give you an accurate view of how much money is available to spend. You may still have un-cleared checks to account for, or incomplete direct debit payments being processed. Reconciling bank accounts regularly is crucial so you always know how much cash you have to work with.
Keep Up With Financial Reporting
Keeping on top of your business’ finances can make it easier to stay profitable. It also makes it easier to plan for future expansions or larger capital purchases, as you’ll have clear visibility into your business’ financial health.
If you’re like most business owners, finding the time to keep up with entering financial data around everything else you’re expected to do can be challenging. Rather than allow your financial reporting to fall behind, engage a professional business accounting or bookkeeping service to keep your records in order. For assistance with small business accounting in Chicago, contact Tunney and Associates.
As a self-employed independent contractor, there are specific tax obligations that apply to you. It is important to follow tax laws set by the IRS to avoid penalties and other problems. When planning for tax needs, consider the following:
Making Your Status as an Independent Contractor Known
If you are an independent contractor but you don’t sign documentation that clearly differentiates you from those working under an employer, you could end up paying different types of taxes — possibly too many in the long run. Ensure that your contract for work on a specific job classifies you as independent.
What Forms do You Need?
As an independent contractor, you will need to fill out a Form W-9 before beginning work. This is a request for your Taxpayer Identification Number and Certification. Form 1099-MISC is necessary to report payments. If you’ve been paid more than $600 from a company for services, you will receive this form by January 31st.
As a self-employed individual, you are responsible for making estimated tax payments quarterly on January 15, April 15, June 15, and September 15. Your estimated payments are due on these dates in order to avoid tax penalties. You may not have to file these taxes depending on your expected tax obligation for the year. Your CPA can help you make this determination.
Penalties and Interest Payments
Not only must you make your estimated tax payments on time to avoid penalties, if applicable, but you must file your taxes by April 15. If you don’t, you may be charged penalties and interest payments.
Bookkeeping and Business Deductions
Self-employed individuals can best spend their time focusing on services instead of business bookkeeping. A CPA can help you organize your accounts with specific software that makes tax planning and filing easier. CPAs can also ensure that you are taking full advantage of all available deductions throughout the year.
Tunney & Associates, PC is an accounting firm dedicated to helping independent contractors remain compliant with strategic tax preparation and planning. At our Chicago firm, self-employed individuals have access to a wealth of services, including bookkeeping, payroll, new business formation and QuickBooks consulting.
Whether you have your own service business as a doctor, lawyer or are an independent contractor in the entertainment industry, Tunney & Associates, PC can help you manage your tax obligations efficiently and effectively. We can help you file your taxes on time and ensure that you have the correct forms and deductions. To avoid paying unnecessary taxes, contact our Chicago tax professionals.
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