It is a brand new year and many of us are looking forward to a fresh start, with endless possibilities and opportunities. But before we can completely embark on our new ventures we are faced with the realization that the fast approaching and painful process of preparing for tax season is upon us. Here are the MUST KNOW tips on how to get ready for tax season.
Many entrepreneurs, small business owners and those in the start-up community tend to have an “I can do it myself” mentality and, in the need to stay lean, try not to pay for anything that they do not absolutely require. When it comes to preparing for tax season we are fortunate to be able to rely on user-friendly software platforms, such as Freshbooks, that makes accounting not so scary! Nonetheless it is a big job to keep accurate accounting records everyday and if you don’t have the time or proper skills it is best to get a part time or freelance person to help. Even if you have been handling your bookkeeping yourself, as tax season approaches you may realize that you are stretching yourself thin and need a little extra help. You may discover that the time you are spending preparing your books is taking away from and better spent working on your core business.
Indeed, as it turns out these same entrepreneurs, small business owners and start-ups who ultimately end up hiring a part time or freelance bookkeeper or accountant sometimes realize that they were not doing it nearly as well on their own. After all, bookkeepers and accountants are known to be sticklers for accuracy.
This leads us to an important question; do I need to hire a part time bookkeeper or an accountant? The answer is…you may need to hire both expertises! Each handles a different stage of the financial cycle.
Bookkeepers: A bookkeeper handles the day to day operations and paperwork of a company such as payroll, paying bills and keeping track of invoices and expenses; they also are responsible for recording daily transactions relying on software programs such as Freshbooks. By consistently maintaining organized documentation makes filing taxes easier and allows a company to face any interim reporting needs. Bookkeepers sort out all your receipts along the way. As you can see, bookkeeping is a time consuming and meticulous job and having a bookkeeper to help you can help you free up time to focus on your core business. Depending on the size of your company you may just need a few hours a month but as you grow your needs will change and you may be looking for a permanent part time bookkeeper. A good bookkeeper will go beyond just paying the bills and managing your cash. They will often pay for themselves by saving you money through negotiating terms with vendors, ensuring your customers pay on time, fully taking advantage of tax incentives, ensuring that customer balances are not too high, and managing your bank accounts to ensure that you are not charged for unnecessary fees.
According to Payscale.com pay for a bookkeeper averages $17.67 per hour, but can range from 13-80$ per hour dependant on experience (IPBC). Bookkeepers can work from home or on occasion at the office. It is best to find a bookkeeper in your city who can meet you at a minimum on occasion to hand over new receipts, statements and bills. Often a good bookkeeper has a communication system already in place ready to transfer information to their home office.
Accountants: The services of an accountant are quite different and broader. Accountants are required to look at the big picture for you and offer advice. They prepare and examine your financial records ensuring that they are done properly and on time. Accountants prepare the reports based on the information accumulated by the bookkeeping process.
Often it makes sense to hire a part time bookkeeper or consultant on an hourly basis which allows you to hire up and down as needed. Whether you’re at the point that you just need the services of a bookkeeper on occasion as a freelancer or you need a more permanent part time bookkeeper, workhoppers.com can match you with the right local expert.