There are a number of reasons it’s a good idea to consult with a third-party accounting firm.
As you grow, for instance, your company will need someone who can offer more than just bookkeeping services. Perhaps you’ll want an accountant to help you prepare financial statements.
Alternatively, you may want them to oversee internal audits for your business. Many companies have found that they benefit from this kind of outside expertise regarding the complicated world of taxes.
In this article, we’ll look at the benefits of using a third-party accounting firm. We’ll also go over why it’s worth consulting with one.
For seven great reasons to consult with a third-party accounting firm, keep reading.
1. Maximize Your Deductions
For most business owners, tax time is a frantic time of year. During this season, they’re usually feverishly trying to come up with a plan.
Unfortunately, many entrepreneurs wait until tax time to figure out how to maximize their yearly deductions. By then, however, it’s too late.
A 3rd party accounting firm can help you to avoid this fate. They’ll help you identify potential tax deductions.
An accounting firm will help you plan strategically for deductions at the end of the year. More importantly, they’ll show you how to track those deductions throughout the year, so you’re not left scrambling at the last minute.
Business owners also often forget to account for and track deductible expenses. These expenses might include depreciation. They may also include any out-of-pocket expenses.
Even home office space is a potential tax deduction. If you have a company car, you could also track and deduct business-related mileage.
Accounting firms can also help with the process of deducting tax preparation fees and stationary costs associated with your business. They might even show you how to save money on taxes by taking advantage of deductions for investments or job-related items such as uniforms.
By consulting with a third-party accountant, you won’t leave money on the table.
2. Keep the IRS Happy
No one wants to get hit with an IRS audit. A tax audit is an inquiry into your organization’s financial records conducted by the Internal Revenue Service. You may not know that you’re under investigation until IRS agents show up at your door.
Mistakenly, many people think that an accountant can fix audit issues when an event occurs. By then, however, they’ve already taken place.
There are several reasons why the Internal Revenue Service may audit your company. For example, you may have made too many mistakes on your tax forms.
Alternatively, you may have been too charitable. In this case, you most likely meant well, but this is also a method that malicious actors use to avoid paying taxes.
Fortunately, you can avoid an audit easily. A third-party accounting firm can provide you with counsel and guidance. They can make sure that your company stays in compliance all year long—and avoids the dreaded IRS audit.
With this in mind, you can think of a third-party accounting firm as your long-term partner. They’ll invest their expertise into your business and make sure that it remains fiscally sound.
3. Save Time and Money
It’s not unusual for an entrepreneur to operate on a tight budget. In these cases, many of them believe that they can’t afford an accountant.
However, consider how much time and effort you spend managing your finances. You must track your financial information accurately so that you can report to the IRS at the end of the year. In some cases, you might need to report to the IRS four times a year.
Consider the mistakes you may make along the way. Also, think about the poor financial decisions that you may make based on this erroneous information. When viewed in this way, the fee you pay for the services of a third-party accounting firm far outweighs the costs.
You’re a businessperson. You should remain free to focus on running your business.
Herein lies a top benefit of hiring a third-party accounting firm. You can engage them continually as a tactical business advisor.
Their services will assist you in maintaining your focus on operating your business. In turn, you can put more effort into reaching your business goals.
4. Make Better Decisions
If you’re like most business owners, you’d probably give just about anything for the ability to see the future—or at least the next best thing. A third-party accounting firm can help you calculate the consequences and implications of your decisions.
For example, you may have considered making a big investment in your office. Alternatively, you may want to weigh the benefits of hiring more staff members. A third-party accounting firm can help you to make a thorough fiscal assessment of these decisions.
Furthermore, an accounting firm can help you to manage your budget. They’ll also aid you in monitoring your cash flow. With their assistance, you can successfully navigate any obstacles that arise in real-time.
It’s important to understand that an accountant won’t take over the financial management of your company. Working with a third-party accountant is a collaborative effort.
Together, you’ll make decisions based on current financial information. In this way, you’ll have access to the information that you need—when you need it.
An accountant will also help you to pursue the right strategy. They’ll work with your team to develop a long-term plan for success. Together, you can create an effective and efficient company structure that ensures growth over time.
5. Plan for Growth
Getting advice on how to plan for the future is one of the biggest benefits of working with a third-party accounting firm. For instance, you can work together to go over reports from previous months. You can also team up to assess the seasonality of your company.
This kind of research, for instance, could help you figure out the best time to stock up on inventory. Alternatively, it may help you budget for big-ticket investments. Together, you can figure out how to sustain your business and stay competitive.
Most likely, much of your focus goes to the day-to-day operations of your business. This kind of focus can make it difficult for you to gain a clear understanding of where your company stands financially.
However, a third-party accounting firm can look at your company’s finances objectively. Furthermore, they’ll have a thorough understanding of the big picture when it comes to the financial health of your company. Accordingly, the best accounting firms can help you figure out the best way to support the long-term success of your business.
Entrepreneurialism can prove solitary. Business ownership can prove considerably time-consuming when you’re left with a pile of receipts and invoices to dig through at the end of each month.
Fortunately, there’s a better alternative. You can work with a third-party accounting firm to help you streamline your finances.
6. Improved Payroll Management
In time, your business will grow. When that day comes, you’ll most likely need to hire employees.
By increasing your staff, you can increase the efficiency of your business. However, your employees will expect to get paid.
It’s difficult for any business to thrive and succeed without employees. Think about it. Do you believe that you can grow all the facets of your business without the help of staff?
Also, do you think that you alone can come up with every possible idea to help your business grow? What’s more, can you accomplish these phenomenal feats while managing a multitude of roles for your company?
Still, it may seem like a no-brainer to hire employees to help your business grow. However, you need to do more than hand out a paycheck every week.
There are intricacies involved in meeting payroll. You’ll need to calculate the pay of your employees accurately.
For instance, you’ll need to calculate and pay the correct withholding tax. You’ll also need to keep detailed records of any benefits that you pay your employees. A third-party accounting firm can help you to manage these vital financial tasks.
7. Access Expertise
Some accountants specialize in specific fields. These fields might include:
- Accounts Payable
In some cases, a large company can suffice by hiring an entry-level bookkeeper. Over time, a company with the resources can teach a solo or an inexperienced bookkeeper new skills.
However, a small business almost always needs a highly experienced accountant. They must hire someone who can manage complex financial tasks independently. They’ll also need the ability to explain their work to the company decision-makers.
A third-party accounting firm is a specialized service provider. Experienced accountants run this kind of company.
These kinds of public accounting firms might serve both consumers and businesses. Like a single accountant, a third-party accounting firm might specialize in various areas. These areas might include:
• Tax governance
An accounting firm might also choose to focus on a specific niche. For instance, the firm may focus on small businesses or corporations.
These kinds of companies also include forensic accounting firms. Yet other companies might focus on law firm accounting.
In either case, an expert accounting firm, such as Templeton & Company, will provide you with an advantage. They can provide you with a high level of service at reduced costs.
Choosing the Right Accounting Firm
Working with an accounting firm is different from working with a single, independent accountant. A certified public accountant (CPA) usually offers a different set of services compared to big accounting firms. Meanwhile, a large accounting firm will usually employ multiple CPAs and administrative personnel.
For instance, there are a few common services that independent CPAs offer. These services include:
- Accounting system set up
• Cost control analysis
• Personal financial advice
• Tax strategy advice
They’ll most likely also provide other services such as preparing financial statements and other documents.
However, working with a large accounting firm is a different experience. Usually, small businesses will contract with a larger third-party accounting firm.
They’ll consult with the firm for several kinds of tasks. These tasks may include:
- Financial audits
• Payroll processing
• Tax preparation
However, a small business is more likely to hire a large accounting firm on an as-needed basis. Still, it may surprise you to learn what a large accounting firm can do for your small business.
Accountants who manage who operate the top accounting firms have years of experience. Accordingly, the largest accounting firms are also well qualified to manage the needs of massive corporations.
Secure Your Future With an Expert Accounting Partner
Accounting services are a critical component of every successful enterprise. Third-party accounting firms cater to all kinds of businesses.
Some businesses cannot function without the help of a professional accountant. Accountants are well-versed in a variety of accounting and financial principles. They work on behalf of customers to ensure their records are accurate and up-to-date at all times.
Accountants play important roles in bookkeeping, auditing, tax preparation and consulting. What’s more, they perform many other roles as needed.
By working with an accountant, you can maximize the value of your company.
The Latest in Business Trends and Updates
Now you know seven great reasons to consult with a third-party accounting firm.
The benefits of working with a third-party accounting firm go far beyond the numbers. You’ll get work done more efficiently and of a higher quality. You’ll also have extra support when it comes to tax time, and there are often other perks that come along with third-party accounting services.
Whether you’re just starting out or are a seasoned entrepreneur, there is always more to learn. Check out our blog for more insightful business news and tips.
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