Tax time (yearly and quarterly) can be stressful for business owners. There are a number of forms and paperwork that must be completed and submitted, along with payments that must be tracked. As such, many businesses look for ways to make this process easier and less stressful. One great place to start is by looking at your current accounting software package's ability to make tax time easier and see if an upgrade would be worth it.
What can software do to ease the workload and reduce stress? It can compile all the necessary forms (1040s, 1099s, W-2s, etc.) so that your tax accountant does not have to.
If you're not using software to handle your business finances, you're likely having to give a bunch of raw data to your accountant and pay a steep hourly fee while he/she sorts through it and find the relevant information and prepared your tax forms.
If you aren't using an accountant, chances are you're spending a lot of your own time doing this - time that you'd rather be spending growing your business or working on things that are more in your area of expertise.Today, accounting software has taken what once used to take days or weeks and shorted the time for completion to seconds. Eliminating this task from your responsibilities will reduce stress, although it won't eliminate stress associated with tax time completely. Remember that so long as data is input in to a system manually, the opportunity for error exists. Therefore, it is important to make sure that you review the software's reports instead of taking them at face value.
As you look for new accounting software programs, tax-reporting functionality is one of the most important features to look out for. Why? Although it is a dry and 'boring' feature (no one finds tax accounting enthralling), it can save your business time and money.
Beyond tax reporting capabilities, some software also comes with tax filing functions. Expect to pay more for this feature and consider if the time savings will be worth it. If you run a small business, this may not be the best way to spend your money as you'll be able to quickly file your taxes with the help of the tax reports that the software can create. However, for larger companies, this is a great feature. Also be aware that some programs with tax filing functionality are more advanced than others. Again, accounting software reviews can be beneficial when deciding which is right for you.
Another important thing to look for in new accounting software is whether or not it has a payroll module. Payroll modules that integrate well with tax reporting modules make preparing end of year forms such as W-2s much easier.
Last but not least, speak with your accountant or accounting department to see what they prefer. All the accounting program reviews in the world can be whisked away by a CPA who despises working with reports provided by a particular program. On the other hand, an experienced CPA who prefers a particular program usually does so for a good reason. Ask him his opinion and his justifications for his preferences.
By letting an accounting software package do the majority of the "heavy lifting" of you during tax time, you can both reduce your stress and workload as well as improve your accuracy.
Using Accounting Software to Make Tax Time Less Stressful