If you’ve waited until tax time to talk to your accountant, you may have waited too long.
Keeping regular contact with your accountant throughout the year is one tip offered to small business owners by many in the industry. That’s according to Xero, an accounting software company catering to small businesses. The company released the results of an annual survey this week in which accountants were asked about their top recommendations for small business owners.
About one-third (32 percent) of the accountants interviewed said small business owners should meet regularly with their tax preparers.
Meeting regularly with your accountant can avoid costly errors. These regular meetings can be used to plan when to make important capital purchases. They can also be used to decide when to incur other expenditures to be sure you have adequate deductions.
About 44 percent of the accountants interviewed by Xero said that meeting monthly with your accountant is important. Just more than 20 percent said that weekly meetings are necessary.
In an interview with Small Business Trends, Xero Partner/CEO and Principal of New Vision CPA Group Jody Padar said that part of the blame for delaying meetings falls on accountants. The industry is set up around spending time once a year sifting through a small business’s paperwork. Instead, accountants should be staying on top of things all year round. And cloud accounting is making that more possible, Padar said:
“You can’t plan in April. If you’re only meeting with your accountant at tax time, you can’t plan.”
If your business uses cloud accounting software, you likely have a better idea of the real-time finances of your company. And your accountant does, too. That makes these meeting times more effective, Padar added:
“One of the benefits is that your accountant gets to know your business. The busy work is already done.”
The survey offers a few more tips for small business owners relevant to accounting and tax time. Chief among those tips is to avoid leaving money on the table, mostly through overlooked deductions. These deductions can include depreciation, out-of-pocket expenses, auto expenses, and office improvements.
Another tip is to avoid faulty deductions, since these are more likely to bring an audit of your return, according to the Xero survey.
Accountant Photo via Shutterstock