Working More Effectively with Your CPA

Hopefully by now, your 2011 taxes are a fading memory (or soon will be!). For many small to mid-sized businesses, the annual, looming tax deadline is a daunting one. As a business owner, the added tasks of compiling tax paperwork amidst a multitude of other daily responsibilities equates to added stress.

Many of our clients are CPA firms, and they have shared with us suggestions on how small businesses can work together with their CPA firm to complete taxes less expensively, earlier and more effectively. With a bit of discipline and a commitment to implementing some organizational strategies, next year's 2012 tax season can be far less stressful. Be proactive by incorporating these CPA recommended strategies into your everyday financial practices:

1. Leverage your existing accounting system.
Whether you have an advanced system or a basic accounting system, maximize its capabilities and use them to their fullest potential. Make a commitment to enter expense data on a regular basis. This can be a challenge for business owners who have other, more pressing issues to address, but making data entry a priority is essential to staying organized and helping you keep your finger on the pulse on your company's finances. Even the most robust systems with numerous reporting capabilities require current data to provide you with accurate financial reports. Keep miscellaneous receipts organized and be diligent about expense tracking all year long- not just before tax season. If you find you cannot remain on top of the data entry, evaluate hiring a bookkeeping service to assist with these tasks. Hiring a bookkeeping service or performing the updates yourself is far less expensive than paying your CPA to complete this. And your CPA will be happy if you leave them to focus on their area of expertise- accounting!

2. Maintain detailed records of your invoices, bank statements and financial reports.
Filing key financial documents in an orderly manner will help you locate the necessary paperwork when tax season arrives. Keep detailed records for financial documents including invoices, bank statements, loan paperwork, and financial reports such as income statements and balance sheets. Work to ensure your accounts payable and accounts receivable records stay current so that you have a clear understanding of cash flow. Keeping these records accurate and current allows your CPA to perform his or her duties more efficiently- and less expensively.

3. Analyze financial records for accuracy.
Financial statements should be reviewed regularly for accuracy, and bank statements should be reconciled systematically to ensure data integrity between your accounting system and your bank. This will eliminate any last minute discrepancies that need to be accounted for prior to tax filings. Regular analysis of financial statements will also allow you to stay on top of issues that may arise and provide you with an accurate sense of profitability so that you aren't shocked with a tax bill in April.

4. Know your filing deadlines
Many small business owners are aware of the April 15th deadline, but there are several other key tax deadlines as well. Payroll taxes, W-2s and 1099 contractor forms all require filing and distribution prior to April 15th. Business owners need to adhere to these filing deadlines, as well, to avoid penalties. If you do not have the time or expertise to manage these additional filing deadlines, consider hiring a tax advisor or payroll service to assist you.

5. Keep an ongoing list of questions for your accountant
You know your business best and how it operates. Throughout the year, maintain an active list of questions for your CPA so that you can gain clarification on questions that may arise about your financial operations and their resulting tax implications. An even better option is to meet quarterly with your accountant to review those questions so that you can implement practices during the current calendar year which can positively impact your company's filings.

As a small or mid-sized business owner, implementing these strategies will allow you to partner with your CPA more effectively and make your 2012 tax filing season far less stressful. We are currently offering a free analysis of your business processes and accounting system, which can help you prepare for tax season. If you would like to learn more on how Analytix Solutions can help move your business forward, please call me directly at 781.503.9004 or email me at snpatel@analytixsolutions.com.

Satish Patel, CPA
President, Analytix Solutions
Satish Patel, Founder-CEO of Analytix Solutions, has more than two decades of experience as a CPA. He has also advised small and mid-sized businesses on diverse matters such as valuation, accounting, and finance. His experience extends to raising capital and arranging for finance from angel investors.

Optimizing Your Accounting System - Measures to Ensure Your System Functions at its Best

Accounting system optimization involves implementing software to enable quicker turnaround for accounting functions. Specifically, optimization can make for easier, faster, and more accurate accounting, such as processing payroll or resolving accounts payable. Optimizing your accounting systems also reduces the need for manual practices.

Is your accounting system optimized effectively to fully leverage its capabilities?

It's a common practice for accounting firms to rely on software programs to carry out their accounting functions. However, if the programs are not optimized well, the users cannot take full advantage of the system's benefits, resulting in a system that boasts the latest technology but one that is not leveraged.

There are many benefits to an automated accounting system, especially for a small or mid-size business.

• Computerized accounting ensures greater accuracy and speed, resulting in more dependable operations.
• Automated accounting systems save time over manual processes, enabling you to complete more in a shorter time period.
• Automated accounting systems reduce costs associated with establishing a dedicated accounting department, requiring permanent skilled manpower.

Ensuring Optimization

Optimizing your system does not mean completely overhauling your existing system or installing expensive, new software.

However, your first consideration needs to be your company's operational requirements.

Optimization involves professional software knowledge and is best managed by a professional who understands your company in terms of business offerings and client deliverables. This approach considers the importance of customization and offers solutions that are tailored to your unique business needs.

Customized solutions account for your business deliverables and client requirements, ensuring that your system is utilized optimally. These solutions also reduce time and financial expenses, while significantly increasing productivity.

Tips for effectively optimizing your system include:

• Undertaking a comprehensive assessment of your needs and requirements.
• Including non-accounting functions such as time tracking or resource allocation.
• Generating readily accessible reports in an electronic format, thus eliminating the need for paper reports. This can also include interfaces that allow you to access data and accounting information, independent of physical location.
• Reducing the need for human intervention and streamlining processes with adequate security measures in place.

If your accounting system is fully optimized, your business will run more efficiently allowing you to take advantage of significant operational improvements.

Satish Patel, CPA
President, Analytix Solutions
Satish Patel, Founder-CEO of Analytix Solutions, has more than two decades of experience as a CPA. He has also advised small and mid-sized businesses on diverse matters such as valuation, accounting, and finance. His experience extends to raising capital and arranging for finance from angel investors.

Is Payroll Outsourcing Right for Your Business? - 5 reasons Why it May Make Sense

The payroll function is a task every business performs, whether it is a small or a mid-sized company. Smaller firms that maintain a solid, predictable revenue stream, may manage their books internally with assistance from an independent accountant. The accountant is devoted to processing payroll for a limited number of staff members, but is that where your accountant's time is best spent? There are most likely other functions that require accounting level expertise, especially as your company grows.

As you acquire new clients and increase business, a single independent accountant may not be enough to manage your accounting and bookkeeping functions, and you may need to hire additional staff to manage the increased workload.

Outsourcing your payroll function can alleviate some of this increased workload while providing the following benefits:

Cost Savings: A dedicated in-house payroll department can be very expensive for a small business, as it requires skilled, experienced, manpower to process the payroll, maintain accurate records for various withholdings, and manage timely cash disbursements. By outsourcing the payroll function, you eliminate the need to hire a permanent employee to fulfill these duties, while still having access to the expertise required.

Reliability: Payroll errors are taken very seriously by authorities. Irrespective of previous, impressive financial record keeping, payroll errors can escalate into significant issues, creating long term problems for your company. When you outsource your payroll function, this responsibility shifts to the vendor to ensure accurate, error free payroll processing.

Optimized Manpower: By outsourcing the payroll function, your in-house staff is free to focus on other functions which are more critical to your customer relationships and business development. You can also save money on salaries that would have been distributed to hire a permanent employee with payroll expertise or reallocate funds that would have been earmarked for an accountant to perform these tasks to other more meaningful accounting functions.

Timely Payroll: An in-house payroll department is also responsible for tracking staff changes and new employee hires, as well as the associated paperwork. Performing these tasks diminishes in-house staff productivity due to significant administrative follow-up. However, outsourcing the payroll function assigns these duties to the payroll service provider. A payroll provider takes into consideration staff changes and various changes in withholdings as a result, factoring these into planning so that payroll processing occurs on-time.

Increased Security: When payroll is managed in-house, business owners must closely monitor the processing or have complete confidence and assurance that the employee performing this function is trustworthy and incapable of fraud. By outsourcing the payroll, this burden is placed on the payroll processing provider. As a business owner, you save time and financial resources otherwise spent on monitoring employees responsible for this function.

Ask yourself if outsourcing payroll is right for your business.

Satish Patel, CPA
President, Analytix Solutions
Satish Patel, Founder-CEO of Analytix Solutions, has more than two decades of experience as a CPA. He has also advised small and mid-sized businesses on diverse matters such as valuation, accounting, and finance. His experience extends to raising capital and arranging for finance from angel investors.