Tax Preparation Outsourcing: What you need to know
Tax preparation outsourcing services can help public accounting firms of all sizes. These firms cut costs by up to 60 percent by supplementing in-house staff with highly trained onshore and offshore tax professionals. With Outsourcing, firms can:
- Increase morale and productivity by reducing long work hours and weekend staffing requirements.
- Reduce or eliminate peak season overtime costs.
- Refocus staff on higher-value tasks.
- Convert the variable cost of tax preparation to a fixed cost.
- Lead to faster turnaround times on returns because of time zone differences.
- Improve document management processes.
Client Data Security is Priority #1
When considering an Outsourcing solution, you need to be sure your clients’ data is going to be safe and secure. Before you take advantage of an outsourcing service, do your due diligence and make sure that the outsourced tax preparation and accounting vendor maintains:
- Comprehensive non-disclosure agreements.
- A fully trained staff.
- Extensive and continuing training on all the latest federal and state tax laws and codes.
- A high-level final review process.
Why You Should Consider Outsourcing Tax Preparation Services
Today, many companies are trying to operate on leaner budgets, therefore outsourcing administrative tasks becomes a great solution to reduce headcount. Here below, we listed some reasons on why you should consider finding external support on accounting and tax.
Save Time & Focus on Your Business
Accounting and tax preparation can be highly time-consuming. An average internal bookkeeper or accountant needs a lot of time to crosscheck data and get tax declarations, before finalizing the work with top management, who should be dedicating their valuable time on reaching business goals. By outsourcing your accounting and tax preparation work, including tedious tasks related to bills, payroll, mandatory declarations, and other ancillary issues, managers will free up valuable time to be spent on daily operations and bringing in new customers.
Many companies have made the mistake in hiring and training too-green bookkeepers or accountants for the low cost and high convenience. However, hiring juniors means running a risk of them not having the necessary degree of expertise (or the potential of obtaining it). Hiring skilled accountants and properly training your internal accounting department is the best solution, but not everyone can afford hiring experienced personnel, therefore outsourcing accounting work becomes an attractive and practical alternative. By outsourcing, companies save money on expenses related to recruitment, employee benefits, training, accounting software, hardware, and office supplies, so managers can focus on daily operations, team management and customer acquisition which are more important for your company growth.
Assurance of high-quality work
The primary goal of outsourcing any work to another entity is to get a high-quality job. It also means the allocated company will deliver within the same time durations. Outsourcing tax preparation ensures an organization takes away the risk of having incomplete or inappropriate tax compilations.
Focus on key business matters
Another reason that makes organizations outsource tax preparation is to allow their employees to concentrate on value-adding work. Tax preparation is a time-consuming endeavor. Except for companies that specialize with tax compilation, the exercise of filing tax returns has no value addition to an organization. It is a process that consumes time without any financial benefits to many firms. Outsourcing tax preparation services remains the only alternative.
Having in-house tax preparation is great until the organization starts to scale upwards. New employees will be required if a business grows as the demand for a greater workforce increases. The new employees need time to learn the organization’s culture and business environment. Besides increasing the company’s wage bill, new employees decrease overall productivity. To avoid such occurrences, many firms opt to outsource tax preparation services. Outsourcing such tasks ensures a firm is not affected by its growth because tax compilation is managed by a different entity.
When it comes to accounting and tax declaration, avoid mistakes is important and this is less likely to happen with an external team of accountants. Besides, employee fraud is a massive problem and it happens sometimes to small businesses that money is stolen by trusted employees. Enforcing strong internal checks and balances system may stir up unnecessary emotions, therefore, outsourced accounting is the perfect solution. Having a third party to audit your money trail, you will decrease your risk of internal fraud. External services provider also offers impartial standard of checks and balances, which will also help to improve compliance.
Running a business is challenging, taking care of all back-office low-added value tasks are often low on the priority list. Choosing a qualified outsourced accountant is a great investment and your first step towards a lower and higher-value workload. Many companies are discovering the benefits of outsourcing, the sooner you make the switch, the better it is for your company growth.
- Gain greater growth capacity without additional overhead
- Increase efficiency through a digital process
- More effectively manage tax season to reduce burnout and improve work-life balance
- Better retain talent by giving first year staff higher value work
- Enhance client satisfaction by focusing on higher value, personalized service
What All Tax Filing & Preparation Task Can Be Outsourced?
- Tax filing
- Partnership tax return
- Small corporation tax return
- Payroll tax return
- Intangible taxes
- Tangible taxes
- Charter/franchise taxes
- Individual income taxes
- Capital gains taxes
- Heavy equipment use taxes
- Non-profit corporation taxes
- Document management
- Refund tracking
- Tax history
- Post filing