Be it brick and mortar or a completely digital or e-commerce-based organization, finance and accounting is a key function to run the business. It’s essential to have a good team of accountants handling your company’s finances and tax preparation. Data entry outsourcing companies help organizations digitize tax records and ensure that they have a good system to manage tax records and keep them easily accessible. Tax preparation is essential to conform with state and federal tax rates, and to changing international tax laws, if you are doing business on a global scale. Non compliance with the laws can lead to fines from the Internal Revenue Service (IRS), and other penalties. Rather than handling it in-house, outsourcing tax preparation is a viable option to handle this specialized and demanding work.
Both small and big businesses stand to gain significantly by outsourcing accounting and tax preparation tasks to reliable third party vendors. This is an effective way of cutting costs while getting access to quality services. Yet, there are many myths about outsourcing tax preparation, which makes companies hesitant to go ahead. Let’s debunk some of these misconceptions about outsourcing tax preparation:
- Misconception 1: Data Sharing with an Outsourced Accounting Firm Isn’t Safe
Since tax and accounting deals with sensitive information, many companies wonder about the safety of handing over this information to a third party. This is justified on the grounds that it is risky to share confidential tax information online. But if your outsourced tax partner rigorously implements secure ways of sharing the financial data, you can confidently go ahead and entrust them with your work.
Reliable outsourced accounting firms take extra measures to ensure the safety and security of all documents. For instance, instead of using public servers, they advise their clients to use private cloud servers that allow you to share files using cipher encryption or their own developed management portal, which can only be accessed by trusted teams. Besides that, they conduct regular audits to prevent data breach.
Outsourced tax preparation firms understand the sensitive nature of their work so they have even more security procedures than the client company itself implements.
- Misconception 2: Loss of Control Over Finances
Many companies feel that outsourcing tax preparation will result in loss of control over finances. But this is a misconception because in reality, having a specialized firm to help with tax preparation will give you more control over your finances. You will have a process and system built around tax preparation which will ensure adequate control. A reliable business process outsourcing company will also ensure that your taxes are filed efficiently and in time to meet deadlines. It will also give you a clearer picture of your financial standing. If you follow this process diligently, you will be able to take more informed decisions and there will be no loss of control.
- Misconception 3: Outsourcing is Only For Large Firms
There’s a common misconception that outsourcing for tax preparation works only for large firms. But that is not true. Outsourcing is designed to benefit companies of all sizes. Even large firms that can afford to do tax preparation in-house, prefer to outsource the task. Outsourcing companies also provide specialized services and systems tailored to meet the tax preparation needs of smaller and medium-sized companies. Partnering with an expert will ensure steady availability of skilled resources, savings in overhead and other infrastructural expenses, and more time for core business functions.
- Misconception 4: Sending or Transferring Files Takes Too Long
This is not true. With today’s advanced technology, you can send or transfer files much more easily and faster electronically.
- Misconception 5: Outsourced Tax Preparation Is Expensive
If you partner with a professional tax preparation company, they would only charge you for services you use. There would be no ambiguity or hidden charges. According to one study, a Certified Public Accounting (CPA) firm spends 70% of its resources, including time, money and people, for the purpose of tax preparation. Tax preparation outsourcing can help them cut these expenses (capactix.com).
Outsourcing tax preparation services to an efficient back office outsourcing company can help you save time, reduce cost, improve work quality, gain professional expertise, and so much more. Don’t let the misconceptions cloud your judgment. By outsourcing your tax preparation you can focus on your core work.