Don't be tempted to do your own bookkeeping and tax preparation advises Portland tax professional Joseph Anthony. Small business startups with a few partners may decide to do everything they can themselves and contract out the rest. However, just because you can do something, doesn't mean you should.
Most do not consider indirect cost such as their time and supplies they had to purchase when doing something that should be done by someone else. Anthony advises at some point early on, a small business should hire a professional for their tax returns and at least some of their bookkeeping.
One main reason is that tax professionals are more than just preparers. It is important to consult with an accountant outside of the crunch of filing season to be sure you are doing what you can to reduce the tax bill. For instance, many small businesses can benefit from creating a SIMPLE retirement plan for their employees. But, it generally has to be done by October 1 in order for there to be tax benefits for that year.
Keeping your bookkeeping accurate and in good order is not only smart business but also can keep you from having legal problems. A professional, either in-house or hired from the outside, needs to have knowledge of such things as double-entry and how to make a journal entry. Also, your books need to be as organized as possible so the tax pro can do their job effectively and in the least amount of time.
Probably the biggest thing is to be sure your tax pro and bookkeeper work together on your behalf. For instance, a bookkeeper will not know how assets are being depreciated or written off, the accountant will have to advise on that. Bookkeepers and tax pros serve two purposes; they keep you out of trouble and allow you to focus on running your business rather than getting bogged down in financial matters.