Two of the most intimidating and complicated aspects of being a business owner are taxes and bookkeeping. Either one can turn your world upside down. However, outsourcing these tasks might just be the answer you are looking for. Filipino virtual accountants are well versed in US GAAP accounting methods. Plus, have degrees and experience. You don’t have to worry about compromising quality vs cost and it will cost you about $3-$6/hr.
Having a small business with limited resources can be tough. Without an accounting team or assistant to rely on, it is easy to make mistakes preparing your tax returns and balance sheets which will lead to serious consequences.
As a small- or medium-sized business owner, you may still be in the process of learning. One of the things you probably already know is the importance of bookkeeping. Many companies have suffered because they simply overlooked or didn’t give enough attention to this essential part of doing business.
Many business owners have faced tax fraud lawsuits because they failed to report their tax returns correctly. You don’t want to become one of them.
So let’s take a look at the common tax and bookkeeping issues businesses face, as well as, how to deal with them.
Many business owners are not aware that the Internal Revenue Service (IRS) has a ton of rules regarding tax deductions. The rules specifically state the nature of each expense and the corresponding percentage that is allowed to be deducted.
Let’s say, for example, you had a business meeting while vacationing with your family abroad. You might be tempted to declare the travel expenses as a deductible. But in reality, the IRS will classify that expense as non-deductible since your primary goal was not to conduct business abroad.
As a business owner, you need to avoid overstating your deductibles and you must prove that your deductions are valid. It can be really tricky, I know.
Small business owners are notoriously guilty of not tracking or keeping receipts for their deductions (I hope you’re not one of them). They also tend to use their personal funds to pay for business expenses. If you do this, you can lose out on tax deductions.
You should keep all your receipts and let your business reimburse all of your personal expenses, so you can deduct the valid expenses on your tax return.
You can use receipt tracking apps to keep digital copies of your receipts such as Shoeboxed or Evernote.
Tax preparation software is available to everyone who wants to prepare their tax returns on their own. Sure, it’s cheaper than having someone prepare your returns for you. But hiring a CPA or a tax professional will save you more in the long run.
Sometimes automated programs are not up-to-date when it comes to every tax law. Congress and the IRS change tax policies every year. CPAs and tax professionals know every detail of the tax laws. Plus, they can help you legally reduce your tax bills.
I’ve mentioned this earlier as one of the mistakes when dealing with taxes. Mixing between personal and business expenses can also hurt your cash flow.
Avoid using one account for both personal and business funds. Set boundaries and systems up to sort out your expenses. For instance, you should not use the company funds to pay for your trip to the Bahamas.
The tax laws surrounding payroll are so complicated. You make one mistake and you will have to pay the penalty.
Payroll isn’t only your staff’s salary. It also involves employee benefits, bonuses, student loans and more. If you make a mistake on one of them, there is a big chance you’ll get the others wrong as well.
There are a lot of factors that contribute to this problem. Delay in marking invoices paid, failure to track receipts or closing your books too soon are just a few.
Sure, you see a lot of customers coming into your establishment, but how does that affect your income statement?
Proper documentation and regular review of your financial statements allow you to analyze your business financial health and come up with better plans for the future.
It is necessary for you to compare your accounting records with the bank’s. This is to make sure that any discrepancies can be addressed and accounted for. Some of these discrepancies might be a check that is not yet cleared or transfers that are still pending.
It’s a good thing there is technology that can help you simplify bank reconciliation and other accounting tasks. Here are a few types of accounting software you can choose from: Cashbook, Quickbooks, Xero.
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How do you make sure all your documents are stored securely? Do you digitize your files? If yes, congratulations! You’ve saved yourself from a potential disaster. f.
Saving your files in local drives may not be enough. It is even better to save them in a cloud platform. Don’t worry, a cloud platform is highly encrypted so your files are safe.
You can also easily access them anywhere in the world using your smartphone and other devices. Thank you, Internet!
If you are just starting, your budget may be limited to the core functions of your business. You probably do the bookkeeping tasks yourself after work and it takes up a lot of your time.
But this is where the problems with taxes and bookkeeping lie. How can you focus on your main operations if you’re already burned-out because of all the time required for tax returns and balance sheets?
I’m sure you don’t want to run into those problems, or use up all your time to take care of these tasks. Do yourself a favor and let a professional handle all that accounting work for you.
You can focus more on building your business when you don’t have to worry about managing your taxes and financial data.
“But hiring a CPA costs an arm and a leg,” you say? Not really.
There is offshore outsourcing for you.
It’s true. You can outsource all your tax preparation and filing needs as well as your bookkeeping solutions to a virtual assistant who is located on the other side of the globe. It will cost you about $3-$6/hr.
When you have a virtual bookkeeper in your team, you don’t have to worry about paying your bills on time, mailing invoices, handling bank statements and monitoring your KPIs.
Look at the numerous tasks you can outsource to a virtual bookkeeper.
● Tax preparation
● Cash flow management
● Budgeting
● Invoice and general ledgers preparation
● Balance sheet management
● Bank and credit reconciliation
● Payroll processing
● Accounting data entry
● Spreadsheet maintenance
● Financial management
● Petty cash management
● Revenue and expenditure management
● Business plan development
● Sales and purchase order management
Now, imagine having that list being taken care of at a fraction of the cost. When you outsource your virtual bookkeeper to the Philippines it will cost about $500 – $1000 per month.
Don’t believe it? Look at these profiles of CPAs on onlinejobs.ph.
You can see that they have a bunch of experience in accounting and are well-versed in US accounting practices. They are also knowledgeable about the different types of bookkeeping software and possess great communication skills.
Onlinejobs.ph is the best place for you to find your bookkeeping solutions many skilled virtual bookkeepers are out there dying to work for you.
* Disclosure: The link above is an affiliate link, meaning, at no additional cost to you, I will earn a commission if you click through and make a purchase. To find out more about our view on affiliate products, please see this page.
Even accounting firms based in the USA, Canada, Australia, and Singapore outsource to Filipino virtual staff because of the low cost, so they can concentrate on their customer-facing functions.
To give you more options, here are some outsourcing companies (instead of hiring a virtual employee) that offer bookkeeping services. But keep in mind, their services are more expensive.
1. Microsourcing [www.microsourcing.com]
2. Sourcefit [www.sourcefit.com]
3. Staffvirtual [www.staffvirtual.com]
4. Virtual Assistant Talent [virtualassistanttalent.com]
5. Virtual Coworker [www.virtualcoworker.com]
Handling every accounting task is a pain in the butt. As a business owner, you shouldn’t be wasting your time fiddling with your books. You should be spending more time doing what you’re good at.
Hiring a virtual employee allows you to have more time and resources to expand your business. Plus, you won’t get sued and if you get audited all your books will be in order.
Filipino virtual bookkeepers and accountants are well equipped with accounting knowledge and experience, as well as, have high English proficiency levels. You don’t have to worry about compromising quality over cost.
Let me know your thoughts in the comment section or shoot me an email.
Talk soon.
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