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Today, there are numerous small business account software companies willing to compete for your business. These companies have developed sophisticated programs that automate the process of keeping your business budget and filing your taxes each year. Many small businesses will elect to use this option to save money and streamline their accounting needs. However, the option does have relevant shortcomings.
No Need for an Accountant
Many small firms employ an in-house accountant to keep track of expenses and income. These individuals may not even be Certified Public Accountants, and they rarely have more than an undergraduate degree in business. Still, hiring an accountant is expensive. You can save the expense of hiring an in-house accounting lead by simply electing to train yourself to be your own accountant. The small business software companies often offer free training courses in addition to their software. In as little as a week, you can gain all of the knowledge needed to adequately keep your filing. Similarly, you can elect a representative from your office to take on this responsibility instead of hiring someone independently for the job.
Easy Record Keeping and Back Ups
One problem facing businesses is how to keep records. There are so many receipts to track and store year to year, and it is easy to misplace relevant information if you are not careful. Further, theft, fire and flood can all damage paper records. Using a software program, you will typically have the option of backing up your records online or through an external database. This allows you to automate the backup process. You can also easily transfer the files to an accountant if you need to in the future or give an auditor access to your electronic records.
Lack of Ability to Answer Questions
Ultimately, no matter how helpful the software program is, it cannot answer your questions when you do not know how to handle a situation. Only an expert can provide real-time advice. Look for software that comes with support from an accounting firm for an additional fee when you have questions. You can also hire a consultant to review your documents once or twice a year to provide answers to your questions. These solutions can help compensate for the lack of expertise you have in accounting without requiring you to actually hire a full-time expert. Since you have questions only on an infrequent basis, the cost of having them periodically answered will still be cheaper.
Ultimate Responsibility in Audit
When you use an accounting firm to do your small business taxes, the accounting firm has a public responsibility to make sure your taxes are done correctly. If not, the firm can be held liable. The firm will take this threat seriously, and it will likely do everything in its power to double-check your documents for any issues. When you are working on the issue alone, you will carry the burden of the responsibility in an audit. This means you can be held criminally liable if there are errors in your taxes that you failed to detect or correct.
