Richard Milam, CEO, EnableSoft Inc.
Unless you are in the accounting field, the chances are good that this March you’ll be struggling alongside millions of other business leaders who are rushing to file their 2014 taxes on time. This can be a time of great panic as you or your finance team rush to get documentation together in order to meet tight deadlines. Besides late penalties, there are real opportunity costs to this sort of frenetic tax preparation process. Last-minute tax help is expensive, for one. Moreover, every minute you spend preparing taxes yourself or managing others takes time away from managing your organization.
To keep these kinds of tax problems at a minimum, business owners and CEOs should treat taxes like any other important business practice: a process that must be adequately planned-for and that requires the right resources. Through a combination of better planning, technology, and partnerships, businesses can be better equipped to navigate tax time effectively. Let’s look now at some of the ways U.S. companies (especially the small ones) can improve productivity and efficiency during tax season.
Outsource Your Accounting Work Where You Can
Don’t fire your entire Finance and Accounting Department. However, if you are a small business and you want to maximize your precious resources, allocate more of them to sales and marketing and instead choose the right outside partner to handle your tax preparation. Not only do CPAs possess more in-depth tax knowledge that your typical staff accountant, but they handle the dirty work much more efficiently than you can. Tax season is the culmination of a year’s worth of processing accounts receivable and payable, general ledger entries, and other repetitive tasks. It is all better left to a company that can scale these jobs, so you can focus your time and money elsewhere.
Automate the Tax and Accounting Process
For organizations without outside tax help, automation software provides an effective alternative. This technology works with most online and desktop tax preparation applications to locate, enter, and change data just like a human would. In some cases, the software can retrieve information from online bank accounts, accounting software, and even HRM platforms, then enter it into cloud-based tax applications for you. Rather than spending your time each year cobbling together figures from all of your disparate accounts, have an automated “digital CPA” perform the work instead.
Georgia-based Pay It Forward Scholarships used automation software to enter donors’ tax ID information into their state’s Department of Revenue (DOR) web portal. Each year, the non-profit must hire up to 30 temporary employees to help with the work, which secures dollar-for-dollar tax breaks for thousands of contributors. This year, they used Foxtrot software to automate the entire process, rather than outsourcing. “Foxtrot made an enormous difference in our ability to enter all of our applications in one day and minimize the amount of HR resources we had to use,” said Pay It Forward Director, Cary Sinnet. “It took what was normally a very difficult day and made it a very easy one.”
Start Early. Back Up Often.
Your preparation for the 2016 tax season should begin right after you wrap up your 2015 filings. This is the time to establish better habits for next year, evaluate new technologies, and start the process of finding new partners. While you’re at it, it’s also time to implement a back-up policy for your important financial and tax data. In the event of natural disaster or loss, backing up your files to the cloud can save your valuable business information. The days of bankers boxes and filing cabinets are long-gone. Now you must conceive and implement a viable data contingency strategy; the IRS does not accept “the dog ate my homework” excuses.
Tax processes and workflows need not take time away from your business. Through careful planning, partnerships, and technology, you can reduce wasted time and costs associated with tax preparation and filing. The less time you spend with taxes, the more time you’re able to spend doing what you love: leading and helping your business grow.
About Richard Milam
Richard Milam is the Founder and CEO of EnableSoft Incorporated (www.enablesoft.com). EnableSoft, is engaged in offering game changing software products and services to the business and financial services industry, healthcare and a dozen other markets. EnableSoft serves over 500 corporate clients worldwide. Prior to founding EnableSoft in 1995, Richard was a partner and served as Senior Vice President of FiTech PLUSmark, Inc. Richard designed and implemented a business plan to offer bank merger data conversion services which resulted in the successful merger of over 50 financial institutions.