Running a small business is really tough, is it not? I know, because for 28 years I’ve been interfacing with entrepreneurs doing it. So, if it seems like you are fighting a losing battle trying to stay abreast of new tax laws that are inflicting more time to learn and comply with, you are not imagining it.
In fact, in a study conducted by the Small Business Association it was suggested that small businesses pay 67% more to comply with the tax code than large firms do simply because of their small size in absorbing those tax compliance costs. For example, on average, companies with less than 50 employees pay $1,518 per employee in tax compliance cost. Compare this to companies with more than 100 employees and the cost came down to $647 per employee. So why is that? The fact is that many tax laws do not necessarily scale proportionately in complexity with the size of the business. This can put a small business owner at a disadvantage paying a professional advisor to help their business comply with some of the same rules that apply to bigger companies. And it’s not just at the federal level either. State and local tax code can often differ significantly from the federal rules. Plus, engage in business operations in multiple states and your tax filing complexity burden can increase significantly.
Another area where the small business owner is often at a disadvantage is in the management of their accounting system. While a larger company can afford to have accountants and advisors on their staff, not so for the small business owner. More often than not it is the business owner herself who is wearing the bookkeeper’s hat right along with all the other hats she is wearing for her business. Sometimes that works. But for many entrepreneurs, accounting is not their core competency. Just as you would not be very successful in authoring a book if you did not have command of the language you are writing in, you also won’t likely be all that successful in business unless your understand how to write in the language of business – and that is accounting. If the accounting books are a mess that can’t be relied upon to generate meaningful reports, then you won’t have the financial information to manage your business. Your year-end tax accountant will dread to see you. And forget about trying to obtain bank financing if you can’t provide your loan officer with a proper balance sheet, profit and loss report, and cash flow statement.
These are reasons why business owners are fast gravitating toward the convenience of cloud based accounting systems like Quickbooks Online. Imagine the efficiency this opens up for you when you can provide your CPA with access to your online accounting system. Now, your CPA is right there on the cloud working side by side with you, cleaning up your books, advising you, and taking care of all those details that you really don’t want to deal with. Further imagine the convenience of pdf document exchanges through a secure portal system. No longer are you boxing up records to tote off to your CPA’s office. You simply scan documents into the portal for your CPA and in return your completed tax returns are delivered back to you through the portal.
Yes Virginia, this is the new online virtual CPA firm. It really does exist and it offers significant advantages in efficiency and cost containment in professional services for the small business owner over the traditional bricks-and-mortar firms still doing things the old fashioned way.
Lester R. Bahr, CPA
My firm is: Lester Bahr, CPA, LLC
web address http://www.lesterbahrcpa.com/
Based in Allentown, but serve clients everywhere
Bio, testimonials, etc. etc. can all be obtained from my website.