Published by Jillqer White,
The first and the foremost reason behind why many companies outsource their tax accounting functions is the complexity of the tax function. The process becomes even complex, if you are operating in different states or countries. There are also different types of taxes, like property, value-added, sales & use, payroll, income, and transfer taxes. For the perfect management, expertise in each type is essential, that is hard to ensure in an office.
Moreover, outsourcing the tax functions frees up the time that permits your employees to spend energy on the concerns that are more important for the core competency of the business. Usually, the employees who are asked to deal with tax management are also responsible for some other aspects of the business, so their core attention would not be on the tax functions. This can lead to many flaws in the tax reports and management that can affect the business.
What Tax Functions a Third-Party Firm Provides?
There is a perception among many people that tax outsourcing is the preparation of the tax returns through an outsourcing firm. Although, a professional tax management company can serve you with three basic tax functions: tax planning & annual tax compliance, accounting for the income taxes, or preparation of the tax returns. If you want a third-party firm to handle specific tax areas like real & personal property tax, or sales taxes, then you can also opt for co-sourcing. It is totally up to you what tax accounting functions of your company you want the third-party provider to cover for you.
When a Company Should Consider Outsourcing?
A company or an organization should outsource tax functions, like VAT returns in Croydon, when they don’t have the sources or specialized skills for this job. You can also consider outsourcing tax functions to a third-party, when you find out that hiring in-house tax management staff is beyond your budget. In-house team of accountants doesn’t only require the monthly salaries, but also other related expenses, like cost of hardware, software, and training. Outsourcing the tax functions to another firm also becomes a viable option when you don’t have enough office space for the new employees.
Outsourcing tax functions make sense when your company is small and it can’t afford to establish a separate setup for accounting activities within the business premises. There are many tax accounting outsourcing companies around that you can hire to manage your tax functions. Remember that not all companies around would be the right to handle your tax activities.
You must choose a firm that has a great reputation in the industry for its top-of-the-line service standards. Read online reviews, get recommendations from your colleagues, and read online to find the best possible tax accounting third-party firm around to handle your tax activities.