Small businesses operating with limited cash flows rarely have the ability to hire a staff accountant. Instead, funds are prioritized for necessary expenditures to grow the company. 

Managing the business without a full-time accountant doesn't need to mean financial management and important tax filings are left to less specialized workers. This is where accounting services step in and fill an important need for small enterprises, non-profits, and even local municipalities. 

Services particularly shine in the area of taxation where any misstep in calculations or late filings can lead to added costs, time burdens, and stressful audits. An accountant can help prepare for tax season year-round and handle all essential filings. 

Payroll Withholdings

Small business employees can range from the single digits to 500 according to the U.S. Small Business Administration. Each worker needs to be paid, and with this, there are tax filing requirements and payroll withholdings to consider. 

When an enterprise is small enough to keep payroll in-house, an accountant can provide the necessary information to set up state income tax, federal income tax, plus Social Security and Medicare tax withholdings and remit the funds and all employee-related forms to the IRS and state agencies on time. They may also offer a spreadsheet with easy pay period calculations for issuing checks or provide ledger software for tracking day-to-day expenses in an easily shareable format. Accountants can also share insights on outsourcing payroll and benefits administration when the time is right.

Meeting payroll tax obligations is a major way to avoid late filing penalties and later headaches. 

Annual Income Tax Filings

Regardless of the tax-filing structure a small business uses, business tax returns are complex and require many schedules and worksheets to properly report income and deductions and track assets and depreciation. This makes income tax preparation the primary burden contracted accounting services tackle. The level of involvement accountants have with the business on a regular basis is set by contract terms and needs, but at a minimum, the service reviews all relevant documentation for an income tax filing and then completes and files the return. Preliminary work, such as setting up detailed bookkeeping in the office, helps the accountant streamline this process as much as possible and ensures the business maximizes all possible deductions in a calendar year. 

Before filing, they should review the documentation associated with capital expenditures and smaller deductions, such as receipts and invoices, and cross-reference all reported payroll expenses and other expense categories with those reflected in monthly financial reports and year-end reports to identify any errors. Annual revenues are thoroughly reviewed and also cross-referenced with periodic reports to ensure accuracy and reduce the likelihood of an audit.

For more information, reach out to local accounting services.