As the year comes to a close, many small business owners feel overwhelmed by the prospect of completing their year-end accounting tasks. Preparing financial statements, taxes, and other important paperwork can seem like an impossible amount of work to finish before the new year arrives. However, having your year-end books and records in order is essential for your business. That’s where year-end accounting services can help.
While doing your books in-house all year may seem to save money, not having the expertise and time to complete year-end activities properly can end up costing you more in the long run.
In this blog post, we will explore some of the key reasons why engaging accounting professionals for year-end work is beneficial for your small business.
Why Outsourcing Your Year-End Accounting Makes Good Business Sense
Here are some of the key reasons to outsource this important work to accounting services online:
1. Prepare Complete and Accurate Financial Statements
One of the primary tasks that needs to be done at the end of each fiscal year is to prepare financial statements. This includes an income statement, balance sheet, statement of cash flows, and any other reports you need for your business. Producing these statements accurately requires understanding accounting principles, having the appropriate software, and devoting dedicated time.
Many small business owners try to piece together their financial statements themselves at the last minute only to realize they are missing key elements or have made mistakes like depreciation calculations or revenue/expense classifications.
Accountants who prepare financial statements every day have the expertise to catch errors and ensure your reports meet Generally Accepted Accounting Principles (GAAP) standards. They can also provide you with an analysis of any material changes from the prior year.
2. Handle Tax Filings Correctly
Businesses must also prepare annual tax filings, such as corporate/partnership tax returns or sole proprietor schedules. Tax laws change frequently, and filings have specific deadlines that must be met.
Letting a tax professional handle this work gives you confidence your filings will be completed accurately and on time. They also understand valuable deductions and credits your business may qualify for. Missing these opportunities can cost you more in the long run.
Accountants stay up to date on the latest tax law changes to ensure you pay the least amount possible in business taxes each year. Having professionals dedicated to thoroughly researching available tax strategies and options for your specific business situation can save you thousands in taxes owed annually.
3. Comply with Annual Report Requirements
Depending on your legal structure, you may also need to submit annual reports to maintain your entity in good standing. For corporations, this includes producing minutes from shareholder and director meetings held during the year as well as audited or reviewed financial statements. LLCs have their own set of annual compliance tasks.
Having accounting services needed means all documentation is prepared and submitted before state deadlines to avoid penalties. They are knowledgeable about your specific industry and entity type requirements.
4. Facilitate Audits and Reviews
Businesses in regulated industries or those taking loans may be required to obtain audited or reviewed financial statements each year. While an audit provides the highest level of assurance, it is an extensive process touching all areas of the business. Similarly, reviews still require verification of financial data and disclosures.
Having accounting records readily available makes the process go smoother. Accountants can also represent your business during any audits and answer technical accounting questions that come up. Without complete and organized records, your audit could be prolonged or result in findings that need correction.
5. Stay Ahead of Bookkeeping
Many entrepreneurs fall behind on regular bookkeeping tasks throughout the busy year. But leaving it all for a rushed year-end catch-up leads to unnecessary stress.
Working with professional accounting services online on monthly or quarterly bookkeeping means your records stay up to date. By the time year-end rolls around, all that needs to be done is wrap up any final adjustments before statements are prepared.
Maintaining your financial records regularly with professionals provides accurate data for real-time decision-making as well. It also saves you time that would otherwise be spent organizing paper records and searching for missing invoices or bills.
6. Prepare for Strategic Planning
With accurate financial statements in hand, you’ll have much better data to utilize in forward-thinking strategic business planning.
See and analyze the numbers behind your operational gains and losses from the past year. Look at balance sheet trends to gauge overall financial health. Identify departments or products that were most profitable to guide your focus in the upcoming year.
Tax return details provide insight for potential write-offs or credits to utilize. Armed with these insights, you’ll be well-equipped to set goals and strategies to achieve growth.
Accounting services professionals can advise on useful metrics and ratios to benchmark performance. Outsourcing year-end work frees up your time and focus to drive your company’s success in new ways.
7. Manage Accounting System Implementation
If your business is growing and needs a new accounting software system, a year-end closeout is the ideal time to implement an upgrade.
Accountants have experience with various programs to select the best fit. They can help purchase and set up the new software, map over your chart of accounts, and import past transactions. Then, provide training so you can efficiently use its features.
Taking this on internally takes time away from daily operations at a critical period. Let the experts handle the technical aspects of an accounting system changeover so your January starts off smoothly on the new platform.
Proper implementation by accounting professionals helps ensure a seamless transition with minimal disruptions to your bookkeeping workflow. You’ll have peace of mind knowing your new system rollout is in good hands.
Bottom Line: Prioritize Your Time for Growth
As a business owner, your time is best spent on high-level strategy, sales, operations, and other growth-centric activities—not tax codes, accounting rules, or number crunching. Outsourcing routine administrative tasks like year-end bookkeeping and financial statement production frees up your bandwidth. It also provides invaluable expertise, accuracy, and peace of mind that all compliance work has been professionally handled to minimize risk.
Very few company owners have the accounting knowledge embedded in a CPA. So utilizing dedicated accounting services for your annual closeout gives you crucial time back to develop your business further. It’s a smart investment that more than pays for itself in the value you and your leadership team can provide the company.
If you need assistance with your year-end accounting and tax needs, contact the professionals at Computax Services LLC. We have over 25 years of experience ensuring your business’ finances and compliance are taken care of.