Small Business Taxes: What Information Does My Accountant Need?
Preparing small business taxes by yourself can be daunting, so hiring an accountant or tax expert is a great way to save time and create peace of mind this tax season. However, you don’t want to show up to your tax appointment empty-handed. Accountants expect you to bring certain documents and be prepared with the information that is needed to complete your tax return.
Personal Information
First things first. You will need to furnish your accountant with basic personal information including your legal name, current address, and social security number. The easiest way to provide this information is to bring your social security card to your tax appointment.
Previous Year’s Tax Return
Make sure to come with your previous year’s tax return. This 1) helps them get a better understanding of your business, and 2) gives quick information about the deductions your company has (or hasn’t) been taking.
Financial Business Reports
Your accountant will need copies of your basic financial reports. These include:
Profit and Loss Report (or the Income Statement)
Balance Sheet
Statement of Cash Flows
The profit and loss report shows your business’s overall profit (or loss) for the year, while the balance sheet displays your company’s assets and liabilities. The statement of cash flows shows all transactions affecting your business’s cash account.
You should be able to print these basic financial reports from nearly any accounting software program, though report availability varies from software to software. Contact your accountant or tax preparer to see if there are any additional reports they might require or find helpful.
What to look for in an accountant: helpful tips
Owning and running a business is not easy. It can be stressful, it requires hard work, knowledge, and dedication, and above all else, it requires a great deal of time, which for many business owners, is an asset they simply do not have. Because of this, a large percentage of businesses are cutting corners and attempting to save themselves as much cash as possible, which results in them attempting to handle their books themselves, which more often than not, only leads to disaster a little further down the line. Here at Phoenix, we recognise the importance of proper accounting and book-keeping, which is why we offer our cloud based accounting services to clients up and down the UK. Hiring an accountant/accounting firm is easy, hiring an efficient and effective accountant/accounting form however, is a whole other kettle of fish entirely. If you’re on the lookout for an accountant for your business, here are 4 things you should look for.
Effective communication
One of the first things you should look for when considering hiring a prospective accountant is just how well, or how poorly, they’re able to communicate with you. By this, we don’t mean you should look for accountants that are well-spoken and prolific when it comes to writing emails and reports, we mean you should look for accountants that can help you to understand the technical jargon. They need to know what they’re doing of course, but they should be able to communicate with you, in such a way that you’re able to easily understand what they’re talking about, without being confused by big words and technical terms that mean virtually nothing to you. Rather than simply being there to provide a service, they should become a resource, an extension of your business, helping you to expand and enhance your knowledge of how to run and manage your business more efficiently
Useful to your business
Another thing you should look for in potential accountants is whether or not they can actually be truly useful for your business. For example, if you do encounter problems regarding your books, taxes, or finances etc, are they able to come up solutions and perhaps make recommendations of how to manage the financial side of your business more efficiently?
An understanding of your business
Of course, you’re hiring the accountants to take care of your books, taxes, and finances etc, which is obviously what they specialize in, but despite that, they should ideally have a basic understanding of your business and what it is that you actually do. are they willing to learn a little more about your company, can they answer questions about your business if put on the spot, and above all else, if they can’t are they willing to learn? Obviously they don’t need to know every single minor detail of your business, but a basic understanding can, and will, prove very useful at some point down the road.
Cloud based services
Let’s face it, as modern technology now plays such a vital role in day to day life, the importance of ‘being on the cloud’ as it were, is absolutely essential if you wish to get anywhere in the business world. Cloud based accounting services are incredibly beneficial for so many reasons. To begin with, cloud based software can be accessed anywhere with a connection to the internet, making it ideal for people on the move and out of the office a lot. It is cost effective as monthly payments can be made as opposed to large lump sums in one go, and it is incredibly user-friendly. Your accountant can easily share info with you, and vice versa, so if you do encounter any monetary issues, they can easily help you out. As an example, you may wish for your accountant to take a look at your VAT returns before they’re filed. No problem, you can share them in a matter of seconds, and then patiently await your feedback.
Best accounting software: free and paid versions to manage accounts
Accounting software is a necessity when trying to run your own business, and the sooner you implement a good accounting software solution the better. While there are standalone platforms for invoicing software and tax software, generally your accounting platforms will be more comprehensive.
However, while there are some very good paid-for accounting programs around, there are also a strong number of free accounting software solutions currently available, as well as bookkeeping software. While some of these are simply free tiers for paid software, others are freeware programs you can download and use without charge to help with budgeting. There are also time management apps that can integrate for consultants or freelancers who need to charge by hour
This can be very helpful for start-ups who want to keep their accounts organized without committing to a solution, while also reducing initial costs. Other businesses might simply prefer them because they often allow for a greater control of your data, by running on your own machines rather than on third-party clouds.
The package has plenty of features – invoicing, expense tracking, time tracking, a host of business reports, even an option to take credit card payments (for a 2.9% plus 30 cents transaction fee) – but a straightforward interface aimed at non-accountants ensures you’ll be up-and-running right away.
Despite the simplicity, there’s real depth here. You can bill in any currency, save time by setting up recurring invoices, allow customers to pay via credit card by checking a box, and even automatically bill their credit card to keep life simple for everyone.
How to Become an Accountant: Education and Career Roadmap
Should I Become an Accountant?
Accountants can work in the public and private sectors providing consulting, auditing, and analyzing services. Job duties include the review and maintenance of financial records for businesses, the preparation and submission of tax documents for individuals and companies, the assessment of financial operations, and the recommendations for fiscal efficiency to responsible parties, as well as day-to-day management of funds. Longer hours are usually required during tax season.
The education needed to be an accountant is normally a bachelor’s degree. Many accountants pursue voluntary certification as a way of demonstrating expertise to future employers or clients. Becoming a Certified Public Accountant (CPA) is necessary for those who file with the Securities and Exchange Commission (SEC)
Meet Accounting Degree Requirements
A bachelor’s degree is generally the minimum degree you need to be an accountant, especially an entry-level position in the field. Bachelor’s degree programs in accounting are available by that title specifically, or accounting specialization options may be present in broader programs like business administration. Accounting degree requirements include courses in accounting, tax accounting, and auditing, but some also involve additional coursework in management, marketing, and finance.
Success Tips:
Find an internship. An internship with an accounting firm or an organization’s accounting department provides experience that may prove useful for securing a job after graduation. Accounting interns might assist in preparing financial statements, conducting audits, and communicating with clients. Additionally, an individual will often learn about accounting software programs.
Join a professional association. Joining an accounting organization can give you access to networking and career development opportunities. There may be a student chapter on campus, or you can get an individual membership. The associations may have special membership rates for students.
Gain Work Experience
Work experience can help you advance in the field of accounting, and some states require it to take the Certified Public Accountant (CPA) exam. By taking an entry-level accounting position, or possibly an internship, aspiring accountants have an opportunity to observe the duties and responsibilities they’ll perform on a daily basis.
Ways Technology Has Changed The Accounting Industry In The Last 5 Years
Over the last decade, technology has been developing at an exponential rate. It has had a big impact on the way we live our personal lives, and the effect on the ways we work has been even greater. Over the last five years, technology has changed how we manage many different aspects of business operations. Accounting is no exception.
Access to faster software that can perform more complex functions, as well as interconnected technology has made accounting both easier and more efficient. Indeed, organizing financial information, analyzing data, and measuring economic activity has never been simpler.
CLOUD-BASED SYSTEMS
The internet is something all businesses should learn to utilize fully. Too often, we think of the internet as nothing more than the place our company website and social media accounts reside. However, there is a momentous change that is currently sweeping across the corporate world: the cloud.
WHAT DOES THIS MEAN TO YOUR ACCOUNTING BUSINESS? HERE ARE JUST A FEW WAYS IT CAN IMPROVE YOUR PROCESSES.
You can now analyze data in real-time because everyone in your firm has access to the most recent data.
Cloud computing makes e-format documents from the web easier to collect and use.
You have unlimited storage space as your business grows—no matter how large your accounting files are or how many you have.
You can synchronize files across multiple platforms.
Your files are secure and automatically backed up on the cloud.
MORE DIVERSE ROLES FOR THE ACCOUNTANT
If there’s one aspect of accounting that professionals dread the most, it’s the very tedious and tiresome task of compiling and computing data. However, with the advancement of technology, you can now do all that with just a click of a button.