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How to Stay Ready for Audit and Taxes

How to Stay Ready for Audit and Taxes

How to Stay Ready for Audit and Taxes

It is a big source of worry for business owners that when the end of the fiscal year rolls around, will their books and finances be ready to be presented to the CPA and IRS for a Tax Audit? They wonder if they will be having sleepless nights worrying over the fact, they still have unfinished papers and it probably will not be ready in time.
The simplest solution to such dilemmas is technology. With growing technology, it is entirely possible for business owners not to get caught flat footed. The latest business processing technology and accounting system capabilities allow even the smallest scale business operators to fully automate and integrate their accounting functions all year long.

Outsourcing the Services

Outsourcing is without a doubt one of the best ways to be prepared for yearly fiscal reports, especially for the small businesses. An outsourcing accounting service provides the experienced and dedicated teams whose sole purpose is to provide you with prepared and succinct accounting and tax reports. These experts can be hired for a marginally lesser spending of resources, if one were to establish their own complete accounting department.
Some Prominent Benefits for Outsourcing Bookkeeping and Accounting

1. Reliable and Accurate Financial Reports:

When you outsource your financial operations to a specialized firm, you get a dedicated team to correctly process your transactions and keep your reports, according to your specifications, updated on a daily, weekly or monthly basis. Since there is an entire team dedicated to your operations, you will not have to suffer in case an employee takes a vacation or a leave for any reason.

2. On-Hand Accounting Expertise:

An outsourced organization which specializes in accounting services and financial matters will always have a team of trained staff accountants who work alongside with experienced accounting managers. They work hard to maintain their superiority and competency in the market through innovation and use of latest techniques and technologies. Your in-house accounting department cannot handle the strain like they can.

3. QuickBooks Integration:

The best QuickBooks outsourced accounting specialists in the market are those with the designation of a Certified Intuit ProAdvisor. These experts carry an intimate knowledge and experience using third-party, business process applications that can successfully integrate with QuickBooks. They are experts in customizing and optimizing QuickBooks files. They can set up accounting systems that are automated and easily integrate financial data, with little or no manual entry.

Such processes that can be successfully integrated with QuickBooks include bill payment, time tracking, payroll, expense management, billing and collections. These processes supply relatively more accurate, reliable and timely financial intelligence on a daily, monthly or yearly basis, depending upon the user’s specifications.

4. Ready Financial Reports:

An outsourced company provides you with an opportunity to view the completed reports of your finances at any time, not just end of the fiscal year. This allows you to make any decision you wish for your company, based on the reports. You will have access to supply management accounting reports utilizing key performance indicators and company scorecards, which are customized to track and measure your business goals. With these reports, your ability to make informed, data-driven decisions in real time will be immensely increased.

Necessities in your own Accounting:

If you wish to do your own accounting or bookkeeping, the accounting tool QuickBooks has a handy guide to lead the user on effectively taking the appropriate measures to survive the yearly accounting process for finances and taxes. It prepares the user to wrap up the current business year appropriately, archive all the files and prepare for the next fiscal year as well. It has three sections in guidance;
I) Preparation for filing taxes.
II) Routines to undergo for the use of subcontractors.
III) Tasks to do for the employees’ payroll and other requirements.

Necessary Steps to Prepare for Tax Filing:

I) You must resolve all business-related bank and credit card accounts.
II) You must verify all minor cash entries for the tax year.
III) You must make yearly accrual adjustments and corrections.
IV) You must finish and close the books.
V) You must adjust the retained earnings for the year.
VI) You must review details of new equipment purchased during the fiscal year.
VII) You must make the necessary asset depreciation entries and adjustments.
VIII) You must review the fringe benefits that need to be reported on W-2 form.
IX) You must take a physical inventory and reconcile it with book inventory.
X) You must print the relative financial reports.
XI) You must print income Tax Auditor Reports to properly verify tax tracking.
XII) You must Import the tax-related data to Turbo Tax or Intuit ProConnect or other relative software.
XIII) You must print and mail W-2, W-3, 1099, 940, 941 and 1096 forms to IRS by February 1 for 2019 Tax Bracket.
XV) You must archive and back up QuickBooks files

In Summary

By being ready for audit defense or taxes throughout the year will not only provide ample peace of mind to you but it will also prove to be economical. By being prepared, at the end of a fiscal year, your CPA will have to spend lesser time on checking reliability of your numbers. Instead they can spend their time in proper audit and tax preparation, thus reducing their billable hours. This reduces the cost massively.