Two years ago, I blogged about how outsourced bookkeeping services can help you keep your financial records up to date and enable you to avoid filing for an extension on your business tax returns. With the September drop-dead nearing once again (this year it's September 17 instead of September 15), it's a good time to revisit the topic.
Putting the Tension in Extension
The deadline extension exists to give businesses a break in the event of unforeseen circumstances. For example, if a natural disaster impacts the business or a personal health crisis affects a key employee just ahead of the March 15 deadline, it would be unreasonable for the IRS to fine the business for filing a late return. (To be clear, we're talking about small businesses that are structured as partnerships or S corporations. Note that the Final deadline for C Corporations and individuals (with extension) is October 15, 2018) An additional six months ought to be ample time to resolve any issues.
But if you need to file an extension simply because you don't have your records organized, you're asking for trouble. If you're not careful, September 15 will become your de facto deadline every year. And then if you encounter a crisis that prevents you from meeting the drop-dead date, you'll be subject to fines at the very least, and potentially an IRS audit.
Why expose yourself to that additional stress when you don't have to?
Let Outsourcing Ease Your Mind
How can outsourced bookkeeping services get you off the filing-extension treadmill? Let us count the ways:
- By tracking things in real time, not just at tax time: This simple advice from another Supporting Strategies blog is worth repeating: "Don't just compile a haphazard collection of bills, receipts, invoices and expenses and then ask your CPA to figure out at crunch time which deductions are allowed and which aren't."
- By helping you get ahead of the game: As Supporting Strategies Founder & CEO Leslie Jorgensen once put it: "A skilled bookkeeping resource can confirm your business is following best practices throughout the year. They can keep your books clean (and audit-ready) while also helping you interpret the numbers and offering guidance on forecasting and financial planning. Supplying data to your CPA on time at tax time is another bonus."
- By ending the avalanche of paper: If you haven't already migrated to the cloud, you should do so without further delay. Here's why: "Bookkeeping has gone digital. And the way paperwork is done has changed too, with most documents now stored online, in the cloud. If you run a business that traditionally generates tons of paperwork that must be tracked, logged and stored in space-hogging filing cabinets, this is wonderful news." (Bonus point: The cloud also allows you to share documents with your outsourced bookkeeping service.)
If You're Not a Bookkeeper, Why Are You Keeping the Books?
That's a valid question for the owner of any small business, not just a partnership or an S corporation.
Let's face it: It takes a lot of energy and drive to run a business — or to launch one. Business owners tend to be DIY types with a strong work ethic. They start out wearing many hats, including the bookkeeper's. But as the business grows, so do the demands on their time. They get to the point where they simply can't keep up, and that can be costly.
So, if you're still doing the books yourself, and filing for extensions to keep up, let September 17 serve as a reminder that it's time to look at outsourced bookkeeping.