Small businesses can benefit from seeking outside help for tax preparation and other financial processes, according to a new survey from Clutch.
WASHINGTON, DC – August 28, 2018 – Small business owners are not as tax savvy as they think they are, according to a new survey from Clutch, the leading B2B research, ratings, and reviews company. Thirty percent (30%) of small businesses believe they overpay their taxes and could claim more deductions and credits. This is despite the fact that 93% of small businesses rate themselves as “very” or “somewhat confident” in their ability to accurately file taxes.
Clutch surveyed small business owners and managers who are involved in their businesses’ financial decisions to determine how they manage their finances and where they fall short.
Small businesses can benefit from seeking outside help for their taxes, even if they think it isn’t worth the cost, say accounting experts.
“It pays to have an actual tax accountant that knows the latest rules, the financial packages, and who has software that is up-to-date with the IRS,” Wanda Medina, managing partner at Maventri, a full-service digital firm providing accounting, marketing, and administrative support services. “In the long run, it’s going to save a lot of money versus small businesses trying to do it on their own.”
It can also benefit small businesses to seek help for other financial processes. Ninety-five percent (95%) of small business owners and managers say they are “confident” or “very confident” in the accuracy of their overall financial records – but experts say that these same small businesses often don’t recognize or understand when mistakes are being made.
“[Small business owners] can think that they’re fine. Then, they have someone skilled look at their balance sheet, their profit and loss, and say, ‘Hey, this is missing or this isn’t categorized correctly,’” Medina said.
Small Businesses Should Keep Separate Bank Accounts
At least one-quarter of small businesses (27%) do not keep their personal and business finances in separate bank accounts. While this can work for some businesses, it’s typically not recommended and is potentially risky, say experts.
“We recommend that if you have a small business – I don’t care how small – you should create a separate bank account,” said Rhett Molitor, co-founder of Basis 365 Accounting, a cloud-based accounting service.
Separating bank accounts decreases the likelihood of errors, adds Molitor. This separation can benefit the nearly one-quarter of small businesses (23%) that have experienced challenges with mixing business and personal finances in the past year.
Clutch’s 2018 Accounting Survey included 302 small business owners and managers who are involved in their businesses’ financial decisions.
Read the full report here: https://clutch.co/accounting/resources/small-business-accounting-tips-2018
For questions about the survey, a comment on the findings, or an introduction to the industry experts included in the report, reach out to Riley Panko at [email protected].
A B2B research, ratings, and reviews firm in the heart of Washington, DC, Clutch connects small and medium businesses with the best-fit agencies, software, or consultants they need to tackle business challenges together and with confidence. Clutch’s methodology compares business service providers and software in a specific market based on verified client reviews, services offered, work quality, and market presence.