Why should small businesses go for Tax Return Outsourcing?Sukant Senapaty
November 14, 2008 — 1,586 views
A tax is a compulsory payment to the government on income earned by Individuals/entity with out any "QUID-PRO-QUO". It is not a voluntary payment, but a compulsory contribution forced by government authority. In a modern day economy everything, starting from individual, businesses to big corporate need to pay their taxes. Paying taxes in time is something that every business has to do. The affair becomes complicated for businesses since, to arrive on the figures they need to keep a tab of their income and expenditures for the entire year. As such accounting and bookkeeping help, for proper record of financial transactions, reconciliations, financial statements preparation and then help from tax preparers who assist in the preparation of returns and confirm that the tax have been updated as required by various legislations have become quite important to the entire process.
And with the spurt in activities and increase in the number of bench staff for the companies, have come in to significance the role of outsource service providers who aim towards helping the businesses with their taxes. The tax return preparation service providers provide service for accounting and bookkeeping data by check, justification and data entry of cost and sales invoice in fulfillment with the updated tax legislation; bank and insignificant tax reconciliations; purchase, visa processing, and print of compulsory accounting register; notice to vat office for concluding conservation of registers and original documents. Another factor that calls for outsourcing of tax return preparation is the lack of quality accountants in different countries which has led to abnormal increase in the rates of tax return preparation. For example a recent study in US show that the number of qualified accountants in US is just not enough to handle the increasing demand from increasing tax compliance, estate planning, advisories etc.
This is where the services of outsourcing vendors come in to picture. With their services which are not only affordable, but also best in terms of quality, businesses can be assured about their taxes being taken care of properly. Study shows that outsourced tax return preparation are not only turned around faster but also come 40-60% cheaper. Another great advantage associated with these companies is that they offer personalized services based on the needs of the clients/businesses. Since they are specialists, the tax preparers keep themselves updated on recent legislations and policy change. Also they are prompt to calculate the effect of such changes on the overall tax liability of the firm. Also they ensure that they file the data, create track sheets, and other necessary things needed to file the right amount of taxes.
With so many advantages involved, it its hardly surprising that the tax processing outsource business has dramatically expanded beyond the client to tax preparers and now, to back-office outsource processing. Many CPA and accounting firms are choosing to outsource tax return preparation to help minimize operating costs and maximize efficiency and gain competitive advantages.
There are many advantages associated with tax return outsourcing. these can be highlighted as under:
- Reduction in the cost of Tax Preparation by 60%.
- Fast Turn around time with 100% client Satisfaction.
- No need to go in for increased workforce in busy seasons.
- Better quality of work as the tasks are handled by persons are experts and very very professional.
- Confidentiality and Security
- Personalized services.
Considerations like these are leading to a spurt in off shoring of tax return preparation to domains outside national boundaries. The increasing number of US tax returns being prepared out of the US stand testimonial to this. A study shows that around 360000 returns were prepared in India in 2006.This figure is likely to jump to around 1.6 million by 2011.And with technologies getting better and better with each passing year it can be safely assumed that these predictions can be easily bettered for better.
About the Author
Sukant, an accountant by profession is the co-founder of APT Services,an accounting firm based in India that caters to the accounting and tax preparation needs of its Clients based in US..Please follow the link http://www.aptservicesonline.com to know more about the services provided by APT Services.