The end of the year is a busy time for every construction business owner. Navigating between bids while reviewing year-end financials can be stressful. It can be a chaotic period where you are trying to get accounting processes completed, while also being mindful not to overlook project planning for the year ahead.
Virtual accounting solutions, which organize and streamline the end of year closing process, have been the saving grace for contractors looking to stay on-task and get the most out of their revenue dollars.
With a remote, U.S. based accounting team, CEOs and business owners have access to knowledgeable, trained staff working to help their business run better, grow faster, and make more money. Often at a significant cost savings versus building an internal accounting department. Let’s review the most notable ways contractors are using virtual accounting solutions.
Contractors are savvy, always looking for ways to be more effective and efficient in their work. That same mindset comes into play when looking at tax savings for their organization. Having an expert walk them through unique and demanding tax situations has protected many contractors from audits and further compliance issues. The most widely used virtual tax reporting and filing solutions include:
- Payroll Tax – Report and Filing
- Annual 1099-misc, 1096 Filing, Employee W2, and Company W3 Filing
- Sales and Use Tax – Compilations and Filing
- Tax Planning Services & Estimated Tax Payments
- Business Entity Planning & Consulting
Utilizing a remote team of tax professionals dedicated to your business success creates the peace of mind that every business owner desires. By providing the necessary insights to plan for a rainy day, or future growth, virtual accounting services offer smart business guidance that positively impacts construction organizations at all levels.
Streamlined Banking Processes
Technology has revolutionized the way businesses address financials. Unfortunately, many within construction are slow to utilize those applications and services that are currently available. Other construction professionals, however, are leaving that old-fashioned way of thinking behind by simplifying and streamlining their banking processes with the help of virtual accounting systems. Examples of efficiencies include:
- Data Entry of Banking and Credit Card Transactions
- Account Reconciliations – Bank, Credit Card, Loan, Investment, and Merchant
- Managing Accounts Payable – Entering Coding, Posting, Bill Pay and Reconciling Bills
- Managing Accounts Receivable – Invoicing, Coding, Entering Payments and Deposits, Statements, Reconciling, Reporting, and Collections
Most virtual accounting firms will set up your financial data safely in the cloud for easy access for anyone that needs access to it.
Having an experienced business partner tasked with financial management has brought a new element of awareness and control to what contractors spend and save. Furthermore, outsourcing your accounting reduces the likelihood of fraud within your financial data. Those extra levels of understanding allow contractors to make business decisions with confidence.
By including a decrease in the value of construction assets, depreciation automatically reduces the amount of taxes owed. Doesn’t every business owner want to save money on their taxes? Of course, they do.
Depreciation and other business tax deductions can be confusing, though. There are different methods for calculating depreciation, so it is imperative to have a well-versed accountant who understands the implication of depreciation on taxes to guarantee accurate calculations.
Furthermore, tax codes can be complicated and often change from year to year. Keeping up with changes is a daunting task for anyone who doesn’t make taxes their entire focus. Due to the sheer amount of contractor assets, many construction organizations are reaching out to virtual accounting services to handle all their tax solutions. They are finding that remote services are a more straightforward and cost-effective way to manage that piece of the business.
Giving tax preparation tasks to professionals who focus solely on taxation instills a sense of confidence for business leaders. It is relieving for them to know their tax work will be accurate. With the stress of taxes off their plate, business leaders and their administrative teams can focus on the tasks that are more important for their business.
Contractors operate lean in the field; now those measures are spilling over into the office. From marketing and sales to accounting, business leaders are taking a deep dive into all their operations to identify where cost reductions and efficiencies can be made. Outsourcing accounting provides business owners with a team of professionals and experts versus hiring a small internal team; making it a cost-effective choice for those looking to avoid paying PTO, health insurance, retirement, and work comp insurance.
Business owners are finding virtual business solutions to be a competitive advantage in what is already a callous construction environment. The professionals and experts at Prime Accounting & HR can help you get back to spending quality time in your business rather than worrying about the accounting functions.