Most business owners know the importance of entrusting their taxes and bookkeeping to professional accountants. Leaving these tasks up to an expert ensures greater accuracy on your financials and allows you to focus more of your time and effort on running your business. But what many business owners don’t realize is that entrusting both of those financial tasks to the same accountant can provide your company with even greater benefits. Learn more about these benefits below. And if you’re looking for an accountant that can handle both your bookkeeping and your company’s taxes, contact Kohl & Company today.
Duplicate work is one of the greatest drains on workplace productivity. You probably already know this, and so you make efforts to ensure that you don’t have employees performing the same tasks, resulting in lost resources and wasted time. But if you have two separate accountants for your bookkeeping and your taxes, then you’re intentionally creating duplicate work. And while that duplicate work and lost productivity may not be in your workplace, among your employees, it’s still a drain on your business.
Not only are you often paying by the hour for both accountants to review the same numbers, but you’ll also find yourself or one of your employees performing the same tasks over and over again in regards to your company’s finances. You’ll be repeating the same information and sending the same financial documents to both individuals. You may even find yourself playing messenger, passing updated information between your two accountants.
But if you have a single accountant attending to both of these financial duties, you eliminate all of that duplicate work. You won’t be paying two people to perform the same tasks, and you’ll take some of that middleman work off your plate so that you can be more productive as well.
Improved Accuracy and Consistency
When it comes to your company’s books and your taxes, it’s incredibly important that both records show the exact same numbers. If there are even the smallest discrepancies, you can find yourself facing serious ramifications if your company were to ever be audited. And, if you have two separate accountants for your books and your taxes, those discrepancies are much more likely to pop up.
Having two accountants for these two tasks is like playing a game of Telephone with your financials, passing information back and forth between the two of them as described above. And, if you’ve ever played Telephone before, you likely know that the end results are not usually very accurate.
Here’s an example: Let’s say the fiscal year has ended, and you send your books over to your tax accountant so they can begin preparing your return. But at about this time, your bookkeeper finds some income that was earned just before the end of the year, but only recently paid; he updates the previous year’s books to reflect the earned income. The updated numbers are never sent on to your tax accountant.
The best-case scenario here is that you catch the error when your tax accountant sends your return over for your review. You ask him to correct it, resulting in additional expenses for your business to pay for the accountant’s time. But in the worst-case scenario, it’s the IRS that catches the error. You’re audited, and end up with heavy fines from the IRS for underreporting your income.
But if your tax accountant and your bookkeeper are one person, you only have one channel of communication for your financials. This greatly reduces the risk of inaccuracies due to miscommunications, helping you to have more accurate financials for your business.
Greater Data Security
Another benefit of having only one channel of communication open for your company’s financials is that it helps to keep your financial data more secure. Every time you share your financial information with a third party, you open a doorway for hackers and cyber thieves to try to sneak in and steal sensitive data. Whether you’re sharing the information via email, fax, post, or any other method, there is always the potential for a data breach. And, the more frequently you put that information out there, the more opportunities you open for a breach to occur.
As already mentioned, multiple accountants means sending the same financial data again and again. But with only one channel of communication for your financials, you can greatly reduce the opportunities for hackers to try to steal your financial data, thereby providing an extra layer of protection for your business.
At Kohl & Company CPAs, we can maintain your company’s books as well as handing your company’s tax return each year. Contact us today to learn how we can help your business with all of its accounting needs. Give us a call today!