How to save money on your bookkeeping and tax services

Have you thought that you pay too much for accounting, bookkeeping, and tax services? You may be right, and there are things that you can do to reduce those expenses.

Keep good records.
Keep accurate records throughout the year, and organize them so that they will be ready for your bookkeeper or accountant. Separate your personal and business records. Divide your business expenses into categories such as office expenses, supplies, travel, meals and entertainment. Keep records of purchases for items such as office equipment, phones, and computers or other items that you can depreciate. If you drive an automobile for work, get one of those auto record books and keep it. Keep your business and personal records separate. If you have a home office, track your expenses for utilities, taxes, and anything that you spend related to your business. If you aren't sure what is important, ask your CPA or bookkeeper.

Organize your records.
Think about buying a bookkeeping program. It is worth your time to talk to your CPA or to a bookkeeper to learn how to set up your records. If you have a small business, seriously consider purchasing bookkeeping software such as QuickBooks or Peachtree. If you do, it is worth your while to ask an accountant or bookkeeper to help you set up your books.

Find a CPA.
If you do not already have a regular CPA, hire one. Ask the CPA that prepares your taxes to take you on as a regular client. A CPA can provide you with advice, he or she can help you avoid making mistakes, and he can help you understand how your business is doing. A good CPA's time is worth every penny.

Find a bookkeeper.
Ask your CPA for a recommendation. Paying for bookkeeping might seem expensive, but it is probably less expensive than doing it yourself. A good bookkeeper will be faster and more accurate than you are likely to be, and the time you save will be time you have to devote to your core business.

The cost of paying a bookkeeper to do your books throughout the year also will be less than the cost of asking your accountant to do it a month before your taxes are due or before you need financial statements for a loan. Even more important, a bookkeeper can provide you with regular statements to help you understand your business' financial position and cash flow.

Ask what you can do to reduce bookkeeping costs.
Talk to your bookkeeper! Find out if there are things that you could do to keep your costs down. Here are several examples.

• Do you stuff all or your receipts in a folder and then ask your bookkeeper or accountant to organize them for you? This is expensive because your bookkeeper is not necessarily familiar with all of your activity. It takes extra time to figure out how to categorize expenses if you have not already organized them.
• Do you wait until the end of the period to provide your documentation and then ask your bookkeeper or accountant for fast turnaround for your statements? There is always a tradeoff between time and money. Asking for expedited service adds to your cost.
• Do you mix up your personal and business records? It takes time for your bookkeeper to figure out which is which, and it increases the possibility of mistakes.
• Figure out how often you want financial statements and which ones you want. Your bookkeeper can provide you with them as often as you wish, but you pay for them even if you do not use them.

Ask what you can do to reduce your tax preparation costs. 

Talk to your CPA or the professional that prepares your filing. He or she can tell you exactly what you need to do in order to simplify your tax filing and to make it less expensive to prepare your return. Here are a few things  you can do.

• Make sure your CPA and your bookkeeper talk to each other.
• Take advantage of the checklists and organizers your accountant provides.
• Review your documents before you take them to your accountant. Make sure that you have everything you need.

Return your calls! Respond to email!
When your bookkeeper or CPA calls or emails, assume it is important and respond! If you do not return your calls or answer your email, then one contact becomes two or three or more. That wastes a lot of time.