Monthly Archives: May 2012

Myths About Filing Taxes

Posted on by

Taxes and tax filing are often one of the most confusing issues people face all year.  With the ever changing laws and guidelines the areas of what is allowed and what is not allowed is often quite difficult to determine.  What’s more is that what works for one person may not work for another leading to even greater confusion.  To help you a bit with the process, below are three common myths about filing taxes.

The first myth has to do with paper filing.  Many people believe that they must file on paper because it is better than filing electronically.  People who often keep every last record for their taxes take great comfort in printing their returns on paper for filing.  That being said, there have been great advances in the e-filing process and this option is now usually the best way to file.   Not only do you receive your refund faster than mailing in a paper return, e-filed returns are often more accurate than their paper counterparts.  There is no waiting in line at the post office, no paying for postage, and you can still print a copy to keep for your records.

The next myth is that you should spend more on tax deductible items just to get more write offs.  While this can be somewhat tempting to do, the amount you are spending is not going to come close to equaling the amount you get back in your tax refund.  Furthermore, spending too much reduces the amount of money you have on hand to work with day to day, just for the chance at a bigger return at the end of the year.  So, think twice about doing this.  It is advisable that you speak with a CPA firm to determine the best purchases to make and the best tax deductions to take.

The third myth when it comes to filing taxes is that a big refund is always best.  Many people attempt to modify their withholding amount during the year, in the hopes of getting a big check at tax time.  Doing this could actually work in the opposite way, and you may end up owing taxes which could negatively impact your personal budget.  Plus, when you overpay through withholding all you are doing is giving the government your money interest free, and you could be using that money now.  Talk to an accountant to find out what your recommended withholding rate is and try to stick to it.  Having more money in your hand each week definitely outweighs a large check one time per year.

What is An Accounting Audit?

Posted on by

accounting audit An accounting audit is a type of financial check that is done externally to monitor a company’s accounting methods.  This check is used to verify financial information has been compiled in a manner that is in accordance with standard practices and there are no errors.  A specialized type of accounting firm, known as an auditing firm performs these external checks.  There are some industries that require companies to submit their books for auditing on an annual basis, to ensure nothing is being overlooked or erroneously reported, either intentionally or unintentionally.

Accounting audits play a very important role in the business world and there is a certain amount of finesse that goes into the process in order to verify the accounting process is done correctly yet the client company is pleased and an ongoing business relationship is established.  This is because if an auditing firm finds many errors and questionable items on a client company’s accounting records, it is very possible the company would opt to not use that firm’s services again.

On the other hand, if the auditing firm is too lax and does not properly analyze the data, the integrity of the financial accounts of the company being subjected to the audit cannot be guaranteed.  If the company were to suffer a major financial issue, the accounting audit would be called into question, and the reputation of the auditing firm would also be looked into.  The auditing firm may suffer just as much as the company being scrutinized since it may lose business from other companies because of these serious issues.

It is very important that accounting audits be conducted on a regular basis, in a proper manner, by a reputable company.  Being able to know for complete certainty that your financial records are complete, accurate, and up to date is extremely important in the business world.  This will help companies to quickly identify many serious situations that could crop up such as someone embezzling from the company, missing accounts, reporting errors, or internal fraud.

When a company takes the steps necessary to complete these types of audits, and the auditing firm completes them in the correct way, to a high standard, information can be accessed promptly, presented to organizations that request it, and it will not be questioned for authenticity or accuracy.  This level of care and trust can truly make or break a company; especially in today’s extremely competitive marketplace.

Hiring CFO Services for Small Businesses

Posted on by

Just about every type of business can benefit from tcfo serviceshe expertise a chief financial officer has to offer.  These professionals are highly skilled in the financial world and can provide a number of CFO services to keep your business’s books and financial records up to date and accurate.   They can also provide a great deal of advice to help plan for the future, to help with tax services, and keep your business running efficiently.

Unfortunately, many small businesses cannot afford to hire an internal CFO as the salary is far too high for businesses of this size to spend yearly.  This does not mean that you have to entirely give up on being able to make use of these skilled professionals.  You can outsource this position and take advantage of part time CFO services.  This makes it easy for all businesses to have access to the skills of a financial expert, with the convenience of paying as the services are needed.

A chief financial officer will work with your financial staff and supervise them to make sure all of your internal accounting operations are working as well as they should be and that all issues are in compliance.  These professionals will be a major factor in the direction and planning of your business and will help a great deal with efficiency.

Some of the most common CFO services include the following:

Developing and executing existing and new financial strategies;

Creating contingency plans to assist with complications and issues with customers and markets before they become a problem;

Completing an analysis to detect issues that may need to be repaired in order to get margins back in alignment;

Creating business plans to help establish or meet short and long term goals, as well as establishing forecasts to assist with the business plans;

Providing ideas to challenge the way your business currently operates in effort to promote growth;

Providing in depth knowledge that will cause the business operators to ask certain questions in order to implement proven growth strategies.

CFO services used on a part time basis will give you all of the above mentioned benefits on an as needed basis, as you see fit.  Whether you decide to make use of these professionals for months, weeks, or even hours, you will find they help to increase profitability, and will keep your business operating smoothly.  You will notice a great improvement in your financial operations, yet you will be paying a fraction of the cost of hiring a full time CFO for your business.

When Your Business Should Hire a CPA Firm

Posted on by

cpa firmsCPA firms provide a number of benefits when compared to other types of financial professionals.  These firms employ highly trained, well educated professionals who have a deep understanding of all of the financial laws and regulations in place for businesses.  They also have a strict code of ethics that promotes integrity.

A CPA firm can help your business in many different ways, and should not be thought of as just bean counters that you need at certain times to the year to help with year-end reporting or tax time.  CPAs can help with a number of business issues including business planning, investment advice, tax planning, financial planning, and even employee benefit packages.

To ensure you get the very most out of CPA firms you should keep in mind certain qualifications.  The first thing you need to look into are licenses.  The firm you are considering should be able to provide proof that they are licensed to practice in your area and all accountants on staff are also licensed and certified.  You may also want to find out if the firm belongs to any professional organizations and if they hold any other accreditation.  You will want to be sure they are familiar with your situation and will be compatible to work with your business.

To ensure compatibility with your business, think about what services you will need the CPA firm to perform.  The firm must be able to abide by all of the laws and regulations that govern your business in your area.  While most firms do offer a full line of services to accommodate several different types of businesses in many industries, not all of them do, so take the time to make sure the firm you choose will work to meet your precise needs.

You should also spend some time and interview a number of different firms.  Never hire the first company you come across.  Ask about their years in business, the level of experience their staff possess, their rate schedule, and if they will work with your business and your financial staff.  You will want to be sure you feel comfortable with, and trust, your choice as you will be disclosing a great deal of personal financial information.

Finally, you will want to verify what is included in their fees so that you get the most for your money.  If you are paying top dollar for CPA services you will want to make sure you are getting a full and comprehensive service package.