Does tax time leave you stressed and frantic?

Last week I was finishing my business taxes and this week I am completing my personal tax filing.  How is your tax preparation coming?

For years, this event has always weighed heavily on me.  As a perfectionist, I was always double checking accuracy; as an entrepreneur, I was just antagonized by the bureaucracy of it all.

Sometimes hiring a qualified person to do the work, becoming a little more familiar with the work needed, and asking lots of questions is your best path to success.

Unless you are a Certified Public Accountant you probably are not current on tax codes, estate laws, accelerated business depreciation options and other items that can affect your tax filing.  I am not an expert on these things either, and I prefer to keep it that way.  So I hire someone to do this for me—freeing my time to create incoming revenue, rather than worrying about how it is counted.

Many entrepreneurs fail this success test; they try to do too much and hold too much of the information close to their chest.  High stress at tax time is an indication this might be true of you.  Taxes, bookkeeping, payroll processing, website maintenance, or any other administrative job that is not directly tied to the success of your company is subject to this litmus test—no matter how small your company is.

My business taxes will cost me around $6,000 to have prepared this year and save me weeks, maybe more, of time I would otherwise have to spend doing data entry, understanding the current tax code, and finding the correct tax forms for each of my three businesses.  Investing two weeks finishing my Wealth Development Program and running my three businesses will earn me more than $6,000 AND I will be helping women like you earn WAY more than $6,000, too!

Is it a good use of my money to invest in my CPA entering all my business checks and credit card entries, reconciling them, preparing financial statements and then preparing my various tax filings for three businesses?

Absolutely, yes!

If you haven’t hired someone to do keep your financial books in order because you are too small I recommend you find a company that does virtual bookkeeping.   Their rates can be well below what you expect, and when tax time comes you will be reviewing reports, not creating them. My tax seasons have become much less stressful since I gave up doing this activity in the wee hours of the night and weekends.

Whether for taxes or another administrative tasks my decision process looks like this:

1. I look at each area and ask, “Does this affect the heart of my business?”  If not, I hire out someone to help me if it is essential to get done (Things like payroll, taxes cannot be left undone or put off until later.)
2. I look for quality people or firms to hire—they must be people I feel confident can get the job done well.  I always require referrals and I talk to them.  (It costs me even more time to fix something someone has done wrong than to do it myself, so finding the right person or firm is key.)
3. Do they stand behind their work? (For example, I only hire payroll processing companies that will pay the penalties if they do something wrong with my payroll taxes because accuracy on someone’s pay is essential and IRS penalties can be steep.)
4. I ask questions and get involved in the work so that I understand it—I don’t accept their work or recommendations carte blanche as absolutely right.  I have hired this person or firm to a specific task, but just like when I have an employee do work—it is still up to me to ensure it is right and accurately represents my company.  When this is in an area I do not have much knowledge, I ask lots of questions and make sure that what they have provided me makes sense based on what I know about how my company operates.  With financials if the resulting financial statements are different than I expect, one of two things has happened.  Either, I did not understand some piece of my operations or there is an error in how the documents were prepared perhaps based on a wrong assumption made by someone who doesn’t know my business like I do.
5. I get out of the way and let them do the work they do best, so I can do mine.

The key is to employ others and recognize you do not need to be an expert at everything.  Then during tax time and other hurdles you can still be smiling and working on what you love.

I encourage you to review the list above and see what you can hand off to others in order to have more time for yourself and your business.