The American Dream is about how anyone can take an idea, create it, work hard, and become rich. One caveat, of course, is that even a simple mistake by an inexperienced businessperson can lead to years of tax headaches replete with penalties and fines. It’s enough to put a major damper on the American Dream if the great recession hadn’t done that already.
Without question, the threat of a tax audit by the IRS is a very frightening proposition. Unfortunately, new businesses see a disproportionate level of attention from state and local tax authorities because they make simple mistakes and aren’t yet savvy enough to hide a lot of the money like a lot of big corporations do. That sounds sour, but there has been a chilling effect on start-ups over the last few years.
If these mistakes happen too early on, before money is rolling in, it can result in the business going out of business to no one’s benefit. These unforeseen, often pernicious, costs can be devastating for a business that’s unprepared for them. All of this can happen in a good economy as well, but in today’s environment, they are potentially lethal.
Fortunately, consumers do have an edge in picking a good bookkeeper to handle taxes and those types of issues. There are many to choose from and just as someone facing a DUI wouldn’t pick a corporate lawyer, a small start-up shouldn’t be working with an inappropriate bookkeeping service. Different bookkeeping services have different needs and for people starting up a new business, they can’t just choose any bookkeeping service.
Such a strategy could easily cause more harm than good. It’s critical to find one that primarily works with start-ups and in a given industry that is similar to the one the start-up is in.. This is critical to the success of a new business. Attention to detail and controlling expenses while building revenue will make all of the difference in the first five critical years.
A good bookkeeping service understands this and will help make more money and keep more of the money that is made. This importance is only underlined for businesses in New York and the tri-state area where the upfront costs make it especially difficult for new businesses to thrive. To be one of the ones that does end up thriving requires top-notch bookkeeping.
Still, having a vigilant defender is the most critical aspect to picking a bookkeeping service. That means they need to be knowledgeable and that means that coming from within the industry. A restaurant is going to want a bookkeeping service that works with other restaurants and cash driven businesses. These services are going to be intimately familiar with the tax angles that are most important to restaurants.
Obviously, No bookkeeper can be an expert on everything and most of them specialize, so it’s important to find the right one that works in your given vertical. People want to start a business and follow their dreams, not play defense and strategize to avoid audits, but that’s the reality in today’s day and age. Still, following these steps can go a long way to avoiding a lot of potential pitfalls.
Gavin Harrison is a free lance writer. To get more information about Bookkeeping, Bookkeeping NJ, New Jersey Accountant, New Jersey Bookkeepers and NJ Bookkeeping.