While tax preparation and bookkeeping are technically separate disciplines, there are many ways in which these two financial processes very much complement each other. This is why companies like MCG Solutions that offer one service will frequently offer both.
Let’s take a look at how the services of these financial professionals fit together perfectly in helping you achieve long-term financial health.
Where bookkeeping and tax preparation coincide
First, it’s important to consider the responsibilities of each bookkeepers and tax preparers.
Bookkeepers are responsible for keeping your books accurate and up to date. This makes it easier for you to understand and manage your cash flow, keep track of your bills and make long-term financial forecasts and decisions that will affect the ongoing health of your business. The information you get from your bookkeeper can also get you prepared to meet with your tax prep specialist.
Your tax preparer, meanwhile, is in charge of preparing your taxes based on the financial information you provide them with. This means they greatly benefit from having accurate, thorough bookkeeping and financial records. The greater the accuracy of the information they get, the more accurate they can be with your taxes, reducing the chances of an audit and maximizing your ability to get all available deductions and tax credits.
If your books are in a messy, unorganized state when you pass them off to your tax preparer, they will have to play catch up to make sense of the information you’ve given them. Plus, having messy books makes it difficult to make good business decisions that will impact your long-term financial stability.
This is why it’s so beneficial to enlist the services of both a professional bookkeeper and a professional tax preparer, as their services really complement each other in a critical way. Bookkeepers develop a firm understanding of your day-to-day finances and the state of your business operations, and tax preparers can answer questions about the tax implications of any financial decisions you make.
Plus, working with professionals in both of these areas allows you to significantly reduce the risk of costly errors in your financial documents.
This is why it’s also so beneficial to have the same team handle your bookkeeping and tax preparation. When the same source is doing both of these tasks, the synergy between bookkeeping and tax prep is even better and more efficient, creating a better experience for you as the client and improving overall communication.
For more information about the services we offer at MCG Solutions, contact our team today.