Accounting services for your small business

Running a business can be complicated. For a lot of people, it is especially true when it comes to tasks involving accounting and bookkeeping.  

Luckily, you don’t have to do everything yourself. You can hire an accountant to help you.

Here are some of the accounting and bookkeeping services accounting firms provide to small businesses.

Employee payroll

Whenever you hire an employee to work in your business, you become an unpaid tax collector for the government. You must comply with a myriad of federal, state, and local payroll tax requirements.

These include:

• Properly determining the gross and net wages paid to each employee and accounting for them in your books
• Determining how much tax to withhold from your employees’ paychecks
• Paying the withheld tax, plus your employer contribution, to the IRS
• Paying withheld state income tax to your state tax agency in the 43 states with income taxes
• Paying federal and state unemployment taxes
• Printing checks or making direct deposits of employee pay each pay period
• Filing quarterly and annual employment tax returns
• Issuing W-2 forms to employees
• Filing 1099-MISC for independent contractors you hire
• Updating retirement, vacation, sick pay, and other benefits earned by employees every pay period

It’s important to get payroll right. Failing to pay what you owe on time can get you in big trouble with the IRS and state tax authorities.  

Fortunately, you don’t have to do payroll yourself. An accounting service can perform all these payroll functions for you.

Taxes

Taxes are more complicated for business owners than for employees who work in businesses owned by others. In some cases, you have to prepare two tax returns.  

For example, you’ll need to file two returns if you form a corporation to own and operate your business. You’ll also need to file a separate return if you create a limited liability company with more than one owner or elect to have it taxed as a corporation.

A good accountant will help you prepare your business (and personal) tax return. Handling your tax return involves gathering all your expense and payment data and using it to complete the process.  

But, long before you prepare your return, an accountant will help you with tax planning. For example, an accountant can show you how to maximize your annual deductions and minimize your income by timing your expenses and billings.

Furthermore, an accountant can also show you how to save on taxes by forming a business entity such as a corporation.

Accounts receivable

Do you allow your clients or customers to buy your goods or services on credit? If so, you have “accounts receivable.”  

Accounts receivable, sometimes called “A/R,” is the accounting term for money owed you by your clients or customers.  

It’s important to track accounts receivable accurately. They represent money due from clients or customers.  

It’s also critical to send timely and accurate bills and invoices. If payment isn’t received on time, you need to follow up.  

Keeping track of accounts receivable also provides documentation supporting proof of your income at tax time.

Large businesses often have full-time staff to manage accounts receivable. Small business owners usually can’t afford this, so they have to outsource these tasks. An accountant can track and help collect your accounts receivable.