Many people will agree that it is really difficult to sustain ones business in this period of tough economic recession. Companies are looking at every corner to cut down their expenditure, and one such effective way is to outsource as much work as they can. Many companies have implemented this technique and are able to survive in this tough period. Outsourcing need of Accountants and Bookkeepers in business is now different.
Still many companies are unaware of the benefits of growing outsourcing sector. Moving out IT work to other companies has been practiced for decades, but outsourcing bookkeeping is still unheard by many. Here we highlight some benefits of outsourcing the need of Accountants and bookkeepers in business.
- Save Expenses – saving money is the first main reason of outsourcing work. But this should not be the main objective of moving out work. On an average a company is able to save nearly 20% of in-house bookkeeping expenditure. The fact that you are not required to pay the bookkeeper every month saves you money. Moreover, you don’t have to train an outside accountant. Small and medium size business feel the need of Accountants and Bookkeepers in business but for some it is too much expenditure. They can save considerable money by hiring a bookkeeper service.
- There will no expenses related to employment – You can save much more than just the salary by outsourcing your work. You are not required to make government contributions, pay employees taxes and other benefits. You will save yourself from employees’ compensation, health insurance, retirement benefits, government contribution, travel insurance, retirement, and vacation.
- Less Office Equipment – When you employ an accountant you have to provide him office space. You have to buy software license and computer systems and related things, all this will add to the expenditure. You have to update software license as and when required and train your employee accordingly. This is too much to ask from a small or medium size business. By outsourcing the need of accountants and bookkeepers you can save on these costs.
- Professional Advice – outsourced accountants are not directly attached to your business. Hence, they will not form part of office politics. This means, you will have impartial, unremitting and error free accounting services. This is particularly important during tough fiscal times and the need is to make tough decisions.
- Free Time for you – for business owner, bookkeeping can be a time consuming and tedious work and it can be quite frustrating at times. Thanks to improved infrastructure and technology, outsourcing organizations are quite effective in bookkeeping services. You don’t have to train outside bookkeeper and it will save you 50% of the cost. These trained experts can be exploited by your finance managers at a reasonable cost. You will have more control on outsourced bookkeeping. They will update the software of their own, and satisfactorily fulfil your need of Accountants and Bookkeepers in business.
Small Business Accounting will help you to run your business function properly and smoothly. Accounting is a key factor which is essential for very every business whether it is small sized or medium sized. It is indeed a very important aspect for every business as it helps to keep a track of financial records and expenses for business which depicts the growth of the industry.
Tracking the financial records in an accurate and appropriate manner by the accountants having vast experiences and sound knowledge will help to achieve long term success for the entire business. Managing them properly is a complex and tedious task if it is not done by any professional in this field as the professionals accountant will only have a proper expertise and understanding of all these in-depth processes and will help the business a proper growth in a lowest turnaround time in a best possible way.
As many small business owners try to manage all the accounting and bookkeeping by themselves, but it is indeed very difficult for them to achieve this task as they being a owner has many important tasks to deal with. It is therefore a responsibility of the professional accountants and bookkeepers to maintain the financial records and expenses in proper documents and prepare monthly financial reports in order to depict the whole picture of the small business scenario. This is possible only if the small business owner through his undemanding and knowledge hires professional accountant from outside which can provide them definite aid and perfect solution regarding all the major problems faced by the business in the early beginning phase of the business.
The task of hiring the professional Accountant and Bookkeeper is not easy for the small business owner but it is quite important to hire them as they play a very important role in upbringing the whole business. Their vast and diversified knowledge will help business to achieve the optimum results in a quick around time. In today’s scenario, there is much software accounting software present in the market which makes the process and task of bookers extremely simple and easy as they are the one which is responsible for creating a proper database with proper security. But these softwares work properly and efficiently only if they are managed by some capable and efficient professional person otherwise it does not reveal reliable results.
It is advisable for the small business owner to have a separate account for the deposits and business expenses in order to have a clear over view of the finance in the business which will not let mix the business and personal transactions in any case possible. Further this will also helps to track the financial records quite easily and simply in a regulated manner. This is the major role played by the accountants and even plays a major role in depicting the growth of the industry by filling the summarized information on the tax returns file in order to have a benefit of tax returns and ensures tax savings as well.
Tax Planning Tips for Self Employed Individuals
Self employment is a very interesting field as you are the boss of your own empire. Self employed persons indeed have a more advantage on Tax Savings as they have much more tax efficient income as that of the persons on the salary income basis. So it is very important for them to manage the tax efficiently to avail the full benefit of it. If you are a self employed person and falls in any category fall under head of income.
Here are some of the Tax Planning Tips that will enhance your tax efficiently:
Taking Advantage of all business expenses:
All the expenses related with the business or works are called as business expenses. There are varieties of expenses in the businesses even for the self employed individuals such as house rent, electricity bills, travel costs, internet and telephone costs, and other utilities consuming during the self employed business can be even treated as business expenses. Vouchers and bills can be even considered as the business expenses. To manage all these business expenses in a proper and regulated manner bookkeeper is very much essential. With the aid of proper Tax Planning one can claim the deprecation of all the business or work related expenses and can avail the full income from the Government.
Distribution of Income:
This task is possible in case if you involve your family member in the business. By involving them part of your income is shifted through that side too and will help you to achieve your goal as it helps to reduce taxable business income prevailing in the business.
Normal deductions are allowed for the self employed persons such as PPF (public provident fund), insurance, pension planning, fixed deposits as well as other money saving schemes. Tuition fees of your child can also be claimed from the Government through an effective tax panning scheme from the self employed individuals. One can even avail the claim deduction in regard with medical premium of the parents as well as his/ her family as a whole. If the person is living in the rented home then one can claim the rent of the house even as deduction. These also deductions depends upon the different situations and will be provided by the Government at different interest rates.
Hedge your Risk and Save Taxes:
It is important to have a life insurance scheme for every person in the family in order to have full and proper protection in case of any mishappening and incident. Avail the policies which will help you to protect your family from accident or incidents and even from the medical emergency as well as these liabilities help you to repay the loans in a lowest turnaround time possible very efficiently.
These are therefore some of the most important tips for the tax planning for the self employed individuals running their own business organizations.
People living in Canada have new options which enable them to get more tax refund and prevent few dollars from going into tax man’s pocket. Tax-free savings account is one of the key strategies which enable Canadians to invest five thousand dollars and earn tax free interest on these deposits. The main purpose is to save money and you can open this account from any financial institution. It is used in combination with RRSP – Registered Retirement Savings Plan.
According to a report released by statistics Canada nearly one-third of people living in Canada contribute towards Registered Retirement Savings Plan (RRSP). There is special software which has the embedded features of RRSP. Canadian tax filers will be able to calculate the amount of contribution or check out some other options. It enables them to invest in a scenario that gives them the best return. Your data from the last session will be carried forward by this software.
In reality, very few tax returns among the millions are actually reviewed by the IRS. It is just two percent of the total tax returns that are reviewed annually. Audit Defense Canada does not audit tax return on a routine basis unless there is something which is highly noticeable such as a deduction which required certain documents, the deduction is of high level as compared to earned income, or a certain item that is been listed as “red flag”.
If you receive a letter from Audit Defense Canada that your account will be audited than you should alert your accountant or tax attorney immediately so they can prepare a response appropriately.
Reasons for Audit from Audit Defense Canada
There is a standard list of reasons for an audit. In case you fall in one these categories, it is not necessary that you will have an audit but there are increased chances of getting one. If you fall in one of the following category, you may be audited, but this list in not all inclusive.
- If you use your vehicle for business purpose
- You are self employed
- Your salary is inordinately high
- There is an attempt from your side to deduct expenses of home office
- A long list of itemized deductions is submitted by you
If you do not include all the information related to your income or business, then there is absolutely no way you can prepare tax return in an honest manner. You may be audited at some point in your life, if you include any of the point mentioned in the above list.
Process of Audit Defense Canada
You need not be scared of Audit Defense Canada. Audit personnel will not show up at your office all of a sudden and order you to show your financial accounts and related documents. In the majority of the cases audit is done through mail and only a portion of your entire financial statement. For instance, if business meals are regularly deducted by you the audit personnel may ask for receipts.