It is surprising how many business owners under value accounting and the profound financial impact it can have on business operations, taxation and profit. Effective accounting strategies reduce tax exposure and provide the critical data necessary to prevent or defend against an IRS or California tax audit.
Well-conceived accounting strategies capture information for financial statements and general ledger accounting. Accounting systems should be one of the most valued business assets in your company. Businesses should view accounting as the dashboard into the viability and profitability of their business, as well as a primary source of the data needed to make profitable decisions in today’s fast paced business climate.
Allen Barron provides integrated accounting, tax, business and legal services for domestic and international business clients across the Southwestern United States and here in San Diego. We help our clients to design and implement the accounting systems and data collection which provide financial and strategic insight into the day-to-day operations of your business.
Many business owners under value accounting because they do not understand the information which is genuinely available to them or the financial impact a well-crafted accounting strategy will have upon their business.
For example, a company faces an initial California Board of Equalization or BOE assessment that they owe a substantial amount of sales taxes. Upon examination, the company has paid these sales taxes as they acquired the parts and components necessary to build the product they sold. However, their present accounting system included the sales tax paid on these items as part of the “cost” of their product and did not separate the line item out on appropriate tax return reporting. This simple accounting issue places the company in a vulnerable position before the BOE, exposing them to tens of thousands to hundreds of thousands of dollars in back taxes, penalties and interest.
Accounting systems don’t simply provide financial data, they should capture the important information which informs every business decision you face. There are practical financial benefits such as substantial tax savings and getting invoices out more rapidly. There are vital long-term benefits which affect the profitability and viability of the business itself. Reduce costs, improve customer satisfaction, increase revenues and profits and gain a competitive advantage in today’s highly competitive and fast-moving business environment.
While Many business owners under value accounting we work with our clients to understand not only the important aspects of accounting, but the impact of an integrated accounting, tax and business strategy.