Tax preparation is a crucial process governed by Internal Revenue Codes as well as Federal and State laws. It is a time-consuming and somewhat confusing process that every individual, company, or business owner must comply with. The process itself involves different factors and steps that could be more complex for a business. Running a business means keeping records and details on a myriad of financial transactions. Such documents are essential in doing accurate tax preparation and having a smooth-running place overall.
Doing tax prep for individual income tax returns may be simple enough to do on your own and a bit research; business tax returns are more complex and sometimes involve more significant financial issues. It is best, especially for your business, to let professionals handle your tax prep. We, at Bookkeeping Pearland, TX, could provide you with a simplified yet efficient and modernized bookkeeping system. When you entrust your records to us, you can rest assured that everything is accurate and in place. Since we could promise you a clear and orderly record of all your financial transactions, such as your accounts receivable and accounts payable, doing your tax preparation will be much simpler for us.
Accounting Tax Prep: It is in the Details
Efficient accounting tax prep is made more accessible when every detail is recorded accurately and is easily accessible. This is why it is a wise move for any company or any business owner to outsource all their bookkeeping needs to ensure a proper record of every transaction, particularly those of financial nature. With such records in place, the whole tax process would go more smoothly.
Records of data and information may include, but are not limited, to the following:
- Company Information
- Employee Information (for employee-related taxes)
- Daily Earnings
- Accounts Receivable
- Operating Expenses
- Accounts Payable
Accounts Receivable and Accounts Payable: A Closer Look
Financial statements are crucial in the smooth execution of the overall tax process for a business. Among these financial statements is the balance sheet, which provides information about the solvency of a business. The Balance Sheet records all the business’ assets, liabilities, and equities. Contained within it is the Accounts Payable as well as the Accounts Receivable.
Here, at Bookkeeping Pearland, TX, we offer accounts receivable and accounts payable management among our range of services. We have highly-qualified, rigidly trained, and knowledgeable accountants and bookkeepers who could handle them for you. We keep track of all your accounts receivable and send out the right invoices to clients in a timely fashion. We also keep a careful record of all accounts payables to make a timely payment. Having a clear and orderly record of all your receivables and payables ensures easier checking of details for smoother tax prep; it also goes a long way in ensuring great relationships with clients as well as with suppliers and the like.
In the most basic sense, accounts receivable is money owed to your business, while accounts payable is money that your business owes to suppliers or service providers. Of course, there is more to accounts receivable and accounts payable than that.
Accounts receivable include any balance of money due to a business for goods delivered or services used that are not yet paid for by the clients or customers, or much more simply, business earnings that are yet to be paid. For example, a cake and pastries shop lets one of their loyal customers purchase her wedding cake on credit; until that customer pays for the cake, it remains as a receivable. Another example is when a landscaping company provides a lawn maintenance service to a client that is scheduled to pay, say, at the end of each month; money owed for the landscaping company’s service is also considered a receivable.
Receivables are accounts that your business has a right to receive because you have delivered the product or performed a service for a customer. It is basically a line of credit that you extend to your clients with previously agreed payment terms.
Receivables are recorded as current assets; it usually involves one trade receivables account as well as a non-trade receivables account. A company’s accounts receivable strength can be analyzed and measured with the accounts receivable turnover ratio, which indicates how efficiently a business collects any credit extended to customers. A high turnover ratio depends on various factors such as accurate and timely invoicing, strong customer relationships, clear payment terms, and more. We could help you maintain a high accounts receivable turnover ratio and keep an orderly record of your accounts receivable.
Accounts payable constitutes all amounts that your business must pay to suppliers or other service providers that you have received but have not paid yet. An increase in your payables means that you are getting more goods on credit, while a decrease means the rate at which you are paying prior debts is faster than the rate at which you are purchasing new goods or services on credit.
Efficient management of your accounts payable is essential in managing your overall cash flow; it is also a way to determine your business’ financial health. It is also important to keep careful track of due dates to avoid late payment dues as well as to maintain a good relationship with your suppliers.
Accounts payables may consist of more accounts such as trade payables, sales tax payables, income tax payables, and more. We could efficiently manage your payables and ensure that you will not incur any late fees. We have an efficient team that could handle your accounts payable in such a way that it would have a positive impact on your business.
A streamlined record of a business’ receivables, payables, and any other financial records goes a long way in avoiding any stress and headaches in running your business. It also reflects your business’ stability, especially financially speaking. To make everything more orderly and efficient for your business, let Bookkeeping Pearland, TX handle all your bookkeeping and tax preparation. Schedule an appointment today and start getting great results minus the headache.